A federal court’s decision last week to make the director of the Consumer Financial Protection Bureau report to the president sounded alarm bells in Washington, D.C.’s business and legal community, MorningConsult.com reported yesterday. Financial professionals say that the decision will likely have two major effects on CFPB operations: First, the agency’s prioritization of rules and enforcement actions could change because they fear a court’s reprisal. Second, the next president could opt to terminate the current director, Richard Cordray. A panel of three judges on the U.S. Court of Appeals for the District of Columbia circuit ruled in PHH Corp. vs. CFPB that the 2010 Dodd-Frank Act crafted the director’s position in a manner that consolidated too much power at the top. Judge Brett Kavanaugh, who authored the majority opinion, argued that the CFPB’s director has more power than virtually any other government official, save the president. To remedy this, Kavanaugh ruled that the director must report to the president. The agency’s Republican opponents viewed the ruling as a victory for their efforts to overhaul the CFPB, and Democrats largely brushed off the decision as a minor setback.
