WASHINGTON (Reuters) - One of the most powerful Democrats in the U.S. Congress on Tuesday pressed President-elect Donald Trump to keep the consumer financial watchdog agency’s current director, as rumors about a possible termination and replacement swirled.
Senate Democratic leader Chuck Schumer told reporters that Trump will break his campaign promise of “standing up for workers and consumers against the rigged system” if he fires the U.S. Consumer Financial Protection Bureau’s (CFPB) director, Richard Cordray, after taking office on Friday.
“If Trump intends to keep any of his promises and un-rig the system, he would keep Rich Cordray,” the senator from New York said in a phone call with reporters.
Created in the 2010 Dodd-Frank Wall Street reform law, the CFPB has battled all sorts of lenders through regulation and litigation. It most recently participated in a settlement with Wells Fargo for $190 million for allegedly creating ghost accounts.
By law, the president can only fire the agency’s director for cause, but a recent federal court decision says the U.S. chief executive should be able to dismiss the director at will. That decision has been stayed pending appeal.
Some want Trump to not wait for the appeals court and fire Cordray for cause as soon as he becomes president. At the earliest, the full U.S. Court of Appeals for the District of Columbia Circuit is expected to announce in February whether it will review the case.
Last week, Trump met with one of the agency’s biggest critics, former Republican Representative Randy Neugebauer of Texas, who is frequently mentioned as a top choice for to replace Cordray.
Conservatives say Neugebauer would limit the reach of the CFPB, which they say has gone too far and does not have enough accountability. Congress is controlled by the Republican Party, and most Republicans would prefer having a commission in charge of the agency, instead of a director who both creates and enforces rules.
During the call with reporters, Schumer characterized the possibility of making Neugebauer director as an attempt to dismantle the CFPB from the inside.
Also on the call, Senator Elizabeth Warren of Massachusetts said removing Cordray would allow Trump to block the CFPB’s current work on rules on mandatory arbitration, payday lending and debt collection.
Democrats like Warren, who came up with the idea of an agency to protect individuals’ finances after the 2007-09 crisis, say the CFPB is an important guard against fraud in mortgages, student loans and other consumer products.
Editing by Jonathan Oatis
Our Standards: The Thomson Reuters Trust Principles.