by Brian Simmonds Marshall, Policy Counsel and Veronica Meffe, Legal Fellow; Americans for Financial Reform
No president has removed an appointee for cause. Most presidents have not attempted it and the three times a president has tried to remove an official with for-cause protections—on the ground that the for-cause protection were invalid (not that there was cause for removals)—the courts stopped the president from doing so. Those simple and important facts have been lost amid cries from opponents of strong consumer protection to remove Richard Cordray as Director of the Consumer Financial Protection Bureau (CFPB).
By statute, the president may remove the CFPB’s Director only “for inefficiency, neglect of duty, or malfeasance in office,” the same standard that the Supreme Court held to be constitutional in Humphrey’s Executor (1935). In October, a D.C. Circuit panel ruled that the CFPB Director, as the single-head of an independent agency, could not be so protected. But that decision is now under review by the full D.C. Circuit, which could vacate the panel’s ruling in late December or early January by agreeing to hear further argument in the case.
Assuming the CFPB director’s statutory protections against arbitrary removal remain in effect, history suggests that he will not be removed from office. We reviewed Steven Calabresi and Christopher Yoo's exhaustive history of the removal power, The Unitary Executive, and it does not identify a single for-cause removal in the post-Humphrey’s era.
In the handful of instances the courts declined to stop a removal, it was because the court held that the official did not enjoy protections against removal. For example, in Martin v. Tobin (9th Cir. 1971) and Morgan v. Tennessee Valley Authority (6th Cir. 1940), the courts of appeals held that the officers in question filled purely executive roles and therefore served at the pleasure of the president. Similarly, in Swan v. Clinton (D.C. Cir. 1996), the court held that the official challenging his removal did not have for-cause protections because his term had already expired. And in that case, despite ruling against Swan, the D.C. Circuit acknowledged that the case was justiciable and the court would have had the power to allow him to serve until his successor was confirmed if his removal were in fact illegal.