Finance

Dem senators to Trump: Don't tell consumer bureau chief 'you're fired'

Three top Democratic Senators on Tuesday called on President-elect Donald Trump not to fire the head of the Consumer Financial Protection Bureau (CFPB), calling it an "extreme and unprecedented step."

Senate Minority Leader Charles Schumer (N.Y.) and Sens. Sherrod Brown (Ohio) and Elizabeth Warren (Mass.) defended CFPB Director Richard Cordray's record, saying he should be allowed to finish his term at the bureau's chief through July 2018.

Schumer said Trump's decision to "govern as a hard-right Republican" and possibly replace Cordray breaks his campaign promise to "drain the swamp" by fighting corporate interests on behalf of middle-class Americans.

"Do not tell Richard Cordray he's fired," said Schumer, quoting Trump's signature reality show catchphrase on a conference call with reporters.

"Firing Cordray might be part of the billionaire agenda, but removing him and gutting the consumer bureau would shatter Trump's promise," added Brown, the ranking Democrat on the Senate Banking Committee.

Schumer, Brown and Warren said they'd help lead a national campaign to defend Cordray should Trump decide to fire him.

The CFPB was established as an independent agency, meaning Trump that could only fire Cordray "for cause, " a rare step meant for serious abuses of power. A U.S. Court of Appeals ruled the CFPB's structure unconstitutional, but that ruling has been stayed pending appeal.

Democrats have defended the CFPB against Republican efforts to give Congress more control of its leadership and funding. Schumer, Brown and Warren pointed to $11 billion in restitution that the CFPB secured for Americans.

The CFPB is currently finalizing rules on arbitration clauses, payday lending and debt collecting. Warren said the push to remove Cordray is spearheaded by industries affected by those rules with the goal of eliminating the pending regulations.

"Under Rich Cordray, the CFPB is doing its job on behalf of the American people," said Warren, who helped develop the agency as an adviser to President Obama before joining the Senate in 2013.

Warren wondered whether Trump would "side with working families" or instead choose "the lobbyists for big panks, payday lenders and debt collectors."

Trump is reportedly considering former Rep. Randy Neugebauer (R-Texas) to lead the agency as its sole director. Neugebauer was one of several House Financial Services Committee Republicans who opposed the CFPB's power and structure.

Schumer said Neugebauer would destroy the agency from within.

"It's like putting the biggest arsonist that we know of in the firehouse," said Schumer.

Neugebauer wrote a bill in 2015 to install a bipartisan commission to lead the CFPB instead of a sole director.

Republicans say the bipartisan commission would rein in the agency and prevent it from stifling the economy with overbearing enforcement actions.

Democrats say the push for a commission would make the agency effectively powerless. They point to other federal regulatory commissions that lack members because Senate Republicans refuse to approve many of President Obama's nominees.

"We know if there's a commission, it simply won't work," said Brown. "The whole idea of the commission is to emasculate this agency and take away its power."

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