League sources report that the Trump administration argued last week that he should be allowed to fire CFPB Director Cordray, but stopped short of calling the agency unconstitutional.  As a result, the Department of Justice filed a brief with the U.S. Court of Appeals in Washington, D.C.

Here are some excerpts from the brief:

  • “the United States agrees, with the October court decision in the PHH ruling, that single-headed agencies are meaningfully different” from independent commissions like the FTC.
  • “The panel correctly concluded … that the proper remedy for constitutional violation is to sever the provision limiting the president’s authority to remove the CFPB’s director, not to declare the entire agency and its operations unconstitutional.”
  • “A single-director agency lacks those critical structural attributes that have been thought to justify independent status for multi-member regulatory commissions and is unchecked by the constraints of group decision-making among members appointed by different presidents.”
  • “having a single unaccountable director results in great risk that an independent agency will engage in extreme departures from the president’s executive policy.”
  • If the court ultimately sides with the PHH ruling, it would give Trump authority to remove Cordray for any reason before his term expires in July 2018.

Look for more updates in eSignal as this develops.