As we previously discussed, in October 2016, a 3-judge panel of the D.C. Circuit reviewing an enforcement action by the CFPB determined that the Bureau’s director is subject to at-will removal by the President. The Bureau subsequently petitioned for re-hearing before the full court.
Late last week, following a motion to intervene by several state Attorneys General, Senator Sherrod Brown (D-OH) and Representative Maxine Waters (D-CA) filed a joint motion to intervene, as did a group of six unrelated parties (comprising four public interest organizations, a credit union, and a member of the Bureau’s Consumer Advisory Board). In their briefs, both sets of potential intervenors argue that their intervention is necessary because the Bureau may be unable to adequately defend the case, particularly in the event its current Director, Richard Cordray, is removed by President Trump. In particular, Senator Brown and Representative Waters argue that they have an interest in seeing the Bureau structure they put in place as legislators retained, while the other intervenors argue, in sum, that they and the constituencies they represent would be harmed should the termination of Director Cordray derail Bureau policy initiatives and enforcement activities.
As we explained in a prior post, the motions for intervention are of practical importance for two reasons. First, as noted, President Trump could seek to remove Director Cordray and replace him with a new director who is willing to withdraw the Bureau’s appeal. Second, while the Bureau has independent litigating authority before the lower courts, it would need the consent of the Justice Department to pursue a further appeal to the U.S. Supreme Court.* Accordingly, even if Director Cordray were to remain in office, should the Bureau lose its petition for re-hearing, or should it lose on the merits before the full D.C. Circuit, the intervenors may be the only parties willing and able to pursue the case before the Supreme Court.