Richard Cordray, nominee for director of the Consumer Financial Protection Bureau, testifies at a confirmation hearing before the Senate Committee on Banking...
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Why Richard Cordray’s retirement from the CFPB matters

A few months ago, a Wall Street Journal piece described it as “the greatest mystery in Washington.” Nearly a year into Donald Trump’s term, Richard Cordray, a fierce public advocate appointed by Barack Obama, hasn’t yet been removed as the head of the Consumer Financial Protection Bureau.

As it turns out, the Republican president won’t have to fire the Democratic CFPB chief, because as the Washington Post reported, Cordray is stepping down.

Richard Cordray, a target of the banking industry and Republicans in Congress, announced on Wednesday that he planned to step down as head of the Consumer Financial Protection Bureau by the end of the month.

Cordray’s resignation gives President Trump an opportunity to reshape an agency that oversees a significant portion of the financial industry.

The policy consequences are likely to be significant. With Cordray’s departure, the Republican White House is all but certain to move the Consumer Financial Protection Bureau in a far-right direction, to the delight of banking lobbyists. Indeed, Trump has already made his perspective on these issues clear – such as his decision to quietly roll back consumer banking safeguards two weeks ago.

But there’s also the politics to consider, because all things being equal, Cordray probably would’ve preferred to have been fired.

As we discussed back in April, the way the CFPB is structured, its director is not just another member of an administration. Instead, when Obama chose Cordray for the post in 2013, it was for a five-year appointment, which doesn’t end until 2018.

Trump, of course, has wanted to replace Cordray with someone who’d be far friendlier with the financial industry and less aggressive on protecting consumers, but under current law, the CFPB director “may be removed by the president only for ‘inefficiency, neglect of duty, or malfeasance in office.’”

With that in mind, if the president ousted Cordray, he’d likely sue the White House for wrongful termination, which would open the door to a fascinating discovery process.

Cordray, however, is also eyeing Ohio’s 2018 gubernatorial race – he’s the former state attorney general in the Buckeye State – which has created an awkward waiting game between the CFPB director and the Oval Office: would Trump fire Cordray before Cordray quit?

Evidently not. Other than Wall Street, no one is happier to see Cordray head home than officials in the West Wing.