Now that Donald Trump has been sworn in as president, one vital question is whether he will fire the director of the Consumer Financial Protection Bureau (CFPB), Richard Cordray. As director, Cordray wields vast authority over the economy via regulation of mortgages, credit cards, and student loans. In an effort to limit the sway of future legislators, Congress insulated the CFPB from the annual appropriations process by, in effect, providing it a permanent appropriation. Even worse, Congress also curbed presidential oversight by ensuring that the president may fire the director for “inefficiency, neglect of duty, or malfeasance in office.”
Shortly before the election, a panel of the U.S. Court of Appeals for the D.C. Circuit concluded that the law limiting the president’s power to fire the director was unconstitutional. The court reasoned that, by creating an agency with vast powers and shielding it from oversight, Congress violated the Constitution’s provisions designed to defend against arbitrary decisions and the abuse of power. Since the election, the CFPB has sought a review of this decision by the entire court of appeals, contending that it “sets up what may be the most important separation-of-powers case in a generation.”