An Oval Office bill signing attended by lawmakers and financial services interest groups devolved into a venting session about Richard Cordray, the embattled director of the Consumer Financial Protection Bureau, according to six people in the room and two people briefed on the conversation.
The bill signed into law Wednesday rolls back a CFPB rule banning language in financial services contracts that keeps customers from banding together in class-action lawsuits. The undoing of the CFPB’s proposal, called the “arbitration rule,” represents the latest usage by the White House and Congress of their ability to reverse new regulations before they are put into practice.
Rep. Jeb Hensarling, who chairs the House Financial Services Committee and will retire at the end of his term in 2018, remarked that President Donald Trump would expend less energy undoing the CFPB’s actions if he removed Cordray. Republicans view Cordray’s position as the sole figurehead atop an enforcement agency created by the Dodd-Frank Act as the symbol of postrecession regulatory overreach under President Barack Obama.
In response, Trump went around the room and asked what he should do about Cordray, who has three months until the Feb. 1 filing deadline to run for governor of Ohio. According to three of the attendees, the view shared by Trump and the White House view is not to make Cordray a “martyr” – the assumption being that ceremoniously ousting him would afford him hero status among the left and fundraising momentum in a key swing state.
Hensarling and Rep. Sean Duffy were said to push doggedly for Cordray to be fired, suggesting they could write letters to expedite the process. But a White House official notes the views were not unanimous, with Rep. Patrick McHenry disagreeing with his Capitol Hill colleagues.
As the signing was scheduled to wrap, White House chief of staff John Kelly entered the room and suggested the discussion be taken “offline,” according to three attendees. Kelly’s entrance into the Oval Office, in the words of one attendee, ended the conversation “in a New York second.”
The conversation was described as light-hearted and short, but vigorous – with White House officials pointing to a broader strategy behind the thinking of not firing the director.
The White House declined to comment on the record. The signing ceremony was closed to the press but published to the official White House Instagram page. The CFPB declined to comment.
Sarah Flaim, a spokesperson for Hensarling, said the congressman “doesn’t comment on private Oval Office conversations, but has made no secret his desire to see Cordray gone.”
Hensarling in July asked the Office of Special Counsel to investigate Cordray over Hatch Act violations. In an opening statement at an April hearing, Hensarling called for Trump to dismiss Cordray “for all the harm inflicted upon consumers.”
The Office of Special Counsel sent Cordray a letter dated October 12 notifying Cordray that the investigation “found no evidence that you have engaged in any of the types of preliminary activities directed toward candidacy that would violate the Hatch Act.”