ENGLEWOOD, Colo. -

The Republicans control both the legislative and executive branches of government for only the third time since 1929, the previous times being 2001 and 2003 with President George W. Bush.

It would seem to be an opportunity for an end to gridlock, assuming the Republicans can manage to unite themselves.While it may arguably also effectively eliminate checks and balances, a fair guess is that the Republicans will celebrate the next two years by getting as much done as they can possibly agree on.  Expect a new, conservative Supreme Court Justice and an all-out assault on the Affordable Care Act.

Another fair expectation is an equal assault on the Consumer Financial Protection Bureau, if not the Dodd-Frank Act as a whole, and even, possibly, the Telephone Consumer Protection Act.

The CFPB, and the removal of Richard Cordray as director in particular would seem to be logical targets. The recent decision of the United States Court of Appeals for the D.C. Circuit in PHH Corp. vs. CFPB decided Oct. 11 held that the CFPB’s single directorship structure subject only to presidential removal “for cause” is unconstitutional.  While the court’s solution was to neither shut down the CFPB nor invalidate any of its administrative rulings, the court simply severed the “for-cause” provision it considered unconstitutional from the remainder of the Dodd-Frank Act. “With the for-cause provision severed, the President now will have the power to remove the director at will, and to supervise and direct the director.”

Those believing a Clinton victory (or a Trump defeat depending on your perspective) was imminent, gave this holding short shrift in terms of immediate impact.  While it was certainly a blow to the bureau, it was not generally viewed as a death sentence. Now it would seem monumentally dispositive.  Given the Congressional beatings director Cordray has taken in recent hearings and even some Democratic willingness to stem the unilateral power of the director, it’s not unreasonable to think that director Cordray’s job is anything but safe.

Trump needs no reason to fire him. Indeed, he has made a living out of firing people so it is far from unreasonable to imagine director Cordray being called to the boardroom in relatively short order.   

Indeed, director Cordray’s firing could be just the first domino.

If the CFPB suddenly has a Republican banker as director, all of the pending investigations could be thrown into a land unknown. The bureau’s current administrative proceedings, rulings, matters on administrative appeal and pending lawsuits in District Courts around the country could be similarly affected.  With a change in directorship, a change in Bureau policy can’t be far behind. A new director could mean new staff, new policies, new investigators, new procedures, negotiations, settlements and remediation strategies. Stipulated Orders with pending payment terms should be reviewed to determine if they may be fair game for reevaluation by agreement between the parties. These circumstances may be subject to a fresh look by a new CFPB director or perhaps even an oversight board or commission.

If you are currently under CFPB investigation, either supervisory or enforcement, a new strategy may be in order, or at least considered. Should you procrastinate and attempt to outlast the current regime hoping there’s a changing of the guard and all investigations get a fresh look from a new director and his/her staff? Should your settlement documentation contain provisions allowing for future review by the Bureau? The CFPB could accelerate current investigations anticipating a shortened lifespan or even be motivated to negotiate more favorable deals.

Politics is a tough game to bet on. Just ask the pollsters. And the irony may be that the very people whose elected officials may upend the CFPB are in large measure the same people whom the CFPB was originally designed to protect. 

David Silverman, attorney & counselor at law, is based in Colorado. His law practice is focused on business management and regulatory compliance in the financial services industry, including automotive finance. The information contained in this article is not intended as legal advice and should not be so considered by any reader as there is no attorney- client relationship established. It was originally posted here. Silverman can be reached at David@dsilvermanlaw.com, (303) 858-9850 or www.dsilvermanlaw.com.