The Trump administration took an unusual step on Friday in its efforts to defang the U.S. financial consumer watchdog created after the banking crisis, with the executive branch of the federal government telling a court that one of its own agencies is violating the U.S. Constitution.
The Justice Department filed a brief opposing the Consumer Financial Protection Bureau’s appeal of a ruling that its single-director structure does not hew to the constitution.
The decision that the bureau appealed also said the president should have the power to fire the agency’s head at will. Under the 2010 Dodd-Frank Wall Street reform law that created the CFPB to protect individuals against fraud in lending, the president can only fire the agency director for cause.
The CFPB director is currently Obama appointee Richard Cordray, hailed by consumer advocates for taking action against payday lenders, credit card companies and debt collectors. Many bankers and Wall Street executives, along with Republican lawmakers, have said his authority to both write and enforce regulations is too wide.