Another View on Presidential Authority to Remove CFPB Director Cordray

This article previously appeared on Ballard Spahr’s CFPB Monitor and is re-published here with permission.

As rumors swirl that President-elect Trump is planning to remove Director Cordray immediately after January 20th, conflicting views have emerged about his authority to do so before the appeal in PHH is resolved.  We previously blogged about an article written by Aditya Bamzai, an Associate Professor of Law at the University of Virginia School of Law, that asserted the new President could remove Director Cordray while the PHH appeal is pending if the Executive Branch determines that the Dodd-Frank Act’s “for cause” restriction on removal is unconstitutional.  Professor Bamzai also asserted that Director Cordray could not insist that he be allowed to remain in office following a presidential order to vacate it.

Professor Bamzai’s assertions have been challenged in a blog post written by Brianne Gorod, Chief Counsel at the Constitutional Accountability Center.  Ms. Gorod argues that even assuming there are circumstances in which the President can decline to enforce a statute he believes is unconstitutional, existing opinions of the Department of Justice’s Office of Legal Counsel (OCL) make clear that ignoring the law “would be wholly inappropriate” in the context of the CFPB Director.

According to Ms. Gorod, a major reason why the President can sometimes decline to enforce a law is to avoid taking action that is itself unconstitutional.  She argues that compliance with the Dodd-Frank Act’s for-cause removal provision would not require the President to take an action that he believes is unconstitutional (i.e., removal of the CFPB Director is not required to comply with the Constitution).  She also argues that because “there is every reason to think the courts will ultimately conclude that the CFPB’s for-cause removal provision is constitutional,” it would be inconsistent with OLC opinions for a President to choose not to enforce a statute when there is considerable law supporting its constitutionality.

Ms. Gorod also argues that Director Cordray would not have to leave his position to challenge an attempted removal in court and cites examples under President Ronald Reagan and President George H.W. Bush in which officers resisted a removal order until a court could decide whether removal was proper.