WASHINGTON • Rep. Ann Wagner is laying the groundwork for President Donald Trump to fire the Consumer Financial Protection Bureau’s director.
Lawmakers created the bureau in 2011 as a response to the global financial crisis, and the agency has since returned about $11.8 billion to 29 million people.
Republicans, who overwhelmingly opposed the bureau’s creation, say those results stem from an overzealous crackdown on businesses.
Conservatives argue the agency’s regulations put small firms at a disadvantage against bigger corporations, which can more easily afford the bureau’s fines and compliance costs, while making loans more expensive for consumers.
But GOP lawmakers hoping to bring the bureau to heel have a problem: It was designed to have more independence from Congress than most other agencies. Lawmakers cannot dictate its budget, because its funding comes automatically from the Federal Reserve.
The law says the president cannot remove the bureau’s director, former Democratic Ohio Attorney General Richard Cordray, without “cause” before his term ends in mid-2018.
Wagner, R-Ballwin, said such a lack of checks and balances is unconstitutional.
As the new chairwoman of the Financial Services Subcommittee on Oversight and Investigations, she convened her first hearing to build a case for overhauling the agency. Some of the hearing’s speakers argued the president could ignore the statute protecting Cordray’s job and fire him.
Meanwhile, the bureau is fighting a federal court challenge to its constitutionality and authority from PHH Mortgage, which is contesting a $109 million fine from the bureau. The Trump administration on Friday joined the mortgage company’s arguments against the bureau’s constitutionality, an uncommon action that could help constrain the agency.
Wagner also has criticized Cordray for allegations of gender, racial and age discrimination among the bureau’s employees. An attorney at the bureau said she faced retaliation after reporting such discrimination.
“I hope that I’m laying some of the predicate today in hearings like this, that if the president of the United States chooses to dismiss the director — for cause or at-will — that he will be able to do so,” she said, adding it’s not clear if or when that might happen. “The president is quite busy right now, in the first 60 days of his administration.”
Democrats countered that there are other agency heads, such as the FBI director and Federal Reserve chairman, whose tenures span across administrations.
Rep. Keith Ellison, the Minnesota lawmaker who serves as deputy chair of the Democratic National Committee, said the bureau was drawing heat because it has done such an effective job, and questions about constitutionality were a “subterfuge.”
Wagner also has used her seat on the Financial Services Committee to hammer the Barack Obama administration’s fiduciary standard rule, which says financial advisers must put their clients’ best interest first when giving retirement advice. The rule, which was set to replace the current standard of “suitable” advice, has been put on hold by the Trump administration. Wagner stood next to the president as he ordered the delay.
Financial firms rank among Wagner’s biggest donors, with at least $360,000 of her donations in the last election coming from commercial banks, investment firms and other financial institutions, according to the Center for Responsive Politics.
Adam Aton • 202-298-6880
@adamaton on Twitter