Donald Trump has delivered the regulatory state into the arms of its enemies. The president made Big Energy’s favorite attorney general his head of environmental protection; a lawyer who made millions representing banks and hedge funds his SEC director; an evangelist for the prosperity gospel his head of public housing; Microsoft’s former attorney his top enforcer of antitrust law; and a skeptic of “government schools” his Education secretary.
But there was one arm of the administrative state that Trump couldn’t — or wouldn’t — dismantle: the Consumer Financial Protection Bureau (CFPB). Dreamed up by Elizabeth Warren, and implemented by the Obama administration, the agency enjoys broad, independent authority to protect American consumers from financial scams.
So, of course, our populist president was eager to gut the bureau. But the progressive head of the CFPB, Richard Cordray, was set to remain in place until July 2018. Trump could, technically, fire him for cause before that date. And the administration considered it, but quickly concluded the politics were too toxic. As the New York Times reported:
The White House’s restraint was based in part on a pragmatic assessment, according to people familiar with the strategy. At one point, contemplating a high-profile run on the agency, the White House examined polling data from political bellwether states, two people briefed on the matter said. The agency, they concluded, was too popular to pick a public fight with.
…“The public does not share the G.O.P.’s ire toward the agency or its mission,” said Dean Clancy, a Tea Party activist who worked in the White House under President George W. Bush and is now a policy analyst who tracks actions of the consumer bureau. “It is an agency about protecting the little guy, and that is tough to oppose.”
But now, Cordray is gone. On Wednesday, one of the federal government’s last powerful progressives announced that he will be resigning by month’s end.
“I am confident that you will continue to move forward, nurture this institution we have built together, and maintain its essential value to the American public,” Cordray wrote in an email to his staff.
Cordray’s confidence may not be justified. To this point, the agency has successfully pursued its mission, despite the hostility of a Republican administration. Over the past 11 months, the CFPB has recovered $61 million from fraudulent debt collectors, cracked down on payday lenders, and made it possible for consumers to launch class-action lawsuits against financial firms.
But congressional Republicans promptly killed that last rule. And whoever Trump puts in Cordray’s place is all but certain to prevent the agency from producing new regulations that significantly limit Wall Street’s capacity to profit off of consumer exploitation.
In his email to staff, Cordray provided no explanation for his early exit. But for months now, there have been rumors that Cordray might run for governor of Ohio next year as a Democrat. Those rumors look a bit more credible now than they did yesterday.