The chairman of the House Financial Services Committee on Wednesday laid into the leader of the controversial Consumer Financial Protection Bureau (CFPB), calling on President Trump to fire him “immediately.”
Rep. Jeb Hensarling (R-Texas) said CFPB Director Richard Cordray has presided over an “unelected, unaccountable and unconstitutional” agency and should be dismissed by the president.
“For all of the harm caused to consumers, [Cordray] should be dismissed by the president,” Hensarling said before Cordray testified to the committee. “Mr. Cordray, I’m surprised you are here.”
{mosads}Cordray’s appearance comes at a time of uncertainty for the CFPB. The agency has been in Republicans’ crosshairs for as long as it has existed, and they have an opportunity to make major changes to its structure under Trump.
Democrats fiercely defended Cordray and the CFPB, citing the more than $12 billion the bureau won back for more than 29 million jilted Americans from bad financial deals.
“I will be with you forever,” Rep. Maxine Waters (Calif.), the committee’s ranking Democrat, said to Cordray. “I would hope this president, though I doubt it, has the wisdom to keep you on.”
Republicans have proposed replacing Cordray with a bipartisan commission and subjecting the CFPB to the congressional appropriations process. That would give lawmakers more oversight of the agency and its priorities.
Hensarling cited a D.C. circuit court of appeals case ruling the bureau’s structure unconstitutional. That case, PHH vs. CFPB, is currently under a temporary stay, though the Justice Department argued in a March brief that the ruling gives Trump power to fire Cordray.
Republicans spent the more than five hours of the hearing making the case for Cordray’s dismissal. They argued that Cordray’s CFPB routinely overstepped legal and jurisdictional boundaries and prized flashy, expensive fines over consumer freedom.
Multiple Republicans argued that the CFPB ignored signs of fraud at Wells Fargo before fining the bank more than $180 million last September for opening more than 2 million unauthorized accounts.
Rep. Ann Wagner (R-Mo.) said that Cordray was “asleep the wheel” while the Los Angeles Times, federal and local regulators moved the Wells Fargo case forward. She cited several documents outlining the CFPB’s involvement in the case that were compiled in a binder Wagner asked Cordray to review. Cordray ignored the binder and stared at Wagner.
Reps. Bill Huizenga (R-Mich.) and Dave Trott (R-Mich.) both pressed Cordray on why the legal language of the CFPB punitive settlements is less harsh than the press statements announcing the punishments.
Huizenga called the practice “trial by press release.” Cordray said the legal language didn’t change the underlying facts of each case.
“We know the facts, they know the facts, they don’t have a leg to stand on,” Cordray said.
“Like with PHH,” Huizenga snapped back, referring to the mortgage servicer that successfully sued the CFPB over an enforcement action in a case that’s threatening the bureau’s current structure.
Democrats tried to counter Republican attacks and defend the CFPB’s integrity. They displayed pro-CFPB statistics while they talked and insisted that Cordray had led the agency with distinction.
“They would like to take the credit away from you,” Waters said. “Don’t let them deny what you’ve done and what you’ve accomplished.”
Republicans also focused on several recent rules as examples of the agency’s overreach. They argued that the CFPB rules meant to prevent cyclical debt from payday lenders and prepaid card companies eliminated options for poorer Americans.
“If the rule effectively eliminated this industry, where do we go? We’re not eliminating the demand,” said Rep. Dennis Ross (R-Fla.) of the payday lending rule.
GOP lawmakers also said the bureau has ignored subpoenas, dodged congressional oversight and ignored the rights of businesses.
“Clearly you can be a Democrat, uppercase D, and believe in the CFPB, but you cannot be a democrat, lowercase D, and support this agency,” Hensarling said. “This tyranny must end and the people’s constitutional rights returned to them.”
Some Democrats mocked the pressure from Republican colleagues and dismissed their criticisms. Rep. Mike Capuano (D-Mass.) said he felt like he was in “bizarro world.”
“First they complain that you enforce too much,” said Capuano to Cordray. “Then we just heard a 10-minute rant about how you enforce too little,” referring to Wagner’s questions.
Other Democrats praised Cordray’s leadership and the bureau’s mission.
“You are the first and only agency with the single mission of protecting consumers,” said Rep. Al Green (D-Texas). “There is nothing like you.”
“I think both sides of the aisle can agree that there’s nothing like us in the United States,” Cordray said.