Democratic attorneys general from 17 states are seeking to intervene in a lawsuit challenging the makeup of the CFPB, contending that if allowed, the Trump administration will seek to dismantle the agency.
"According to numerous media accounts, the Trump administration is planning to fire and replace the current director as soon as possible," the attorneys general said in their motion to intervene in a lawsuit filed by PHH, a mortgage lender.
In that suit, a panel of the U.S. Circuit Court of Appeals for the District of Columbia ruled that the structure of the CFPB is unconstitutional because it is governed by a single director – currently Richard Cordray – who can only be removed for cause. The panel said that the president should be able to fire the director for any reason, but stayed that order.
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The CFPB and the Obama Justice Department have requested that the full D.C. appeals court consider the case, but the attorneys general contend that the Trump administration may abandon its defense of the agency.
The attorneys general said in their motion that they coordinate their consumer protection lawsuits with the CFPB.
"The current ruling, if permitted to stand, will undermine the power of the State Attorneys General to effectively protect consumers against abuse in the consumer finance industry," they said.
They said the removal of the director's independence would fly in the face of congressional intent and effectively give the president veto power over state enforcement of consumer protection laws.
Two Republican senators, Mike Lee of Utah and Ben Sasse of Nebraska, have called on Trump to fire Cordray.
On Jan. 23, White House Press Secretary Sean Spicer said no decision has been made about Cordray's future.
The motion to intervene was filed by attorneys general of Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Mississippi, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington and the District of Columbia.
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