Richard Cordray, the head of the US Consumer Financial Protection Bureau, is facing legal action from an unusual quarter - the US Department of Justice, which is now supporting President Donald Trump's anti-regulatory agenda.

The Trump Administration has often claimed that it wants to roll back much of the federal Dodd-Frank Act 2010, which set the CFPB up. It has also made it very clear that, if it had its own way, it would repeal Dodd-Frank completely and close the bureau down. Sean Spicer, the White House's press secretary, has called the CFPB unconstitutional. In its latest pronouncement on the subject, the Department of Justice, headed up by President Trump's appointee Attorney General Jeff Sessions, has argued that the president ought to be allowed to replace the CFPB's leadership 'at will.' At the moment, in the words of the Dodd-Frank Act, he cannot do so without 'cause.' The DoJ has stopped short of calling for the bureau's dissolution, however.

The DoJ has embarked on its strategy by intervening in a case involving a financial firm that is appealing against a fine that the CFPB levied on it in 2014. In PHH Corporation v CFPB in October last year, in the US Court of Appeals for the District of Columbia Circuit, PHH Corp, a nonbank mortgage lender and servicer, argued (among other things) that the bureau's decision was invalid because its very structure went against the US Constitution. The court held that this was so, because it is headed by a single director who can be removed by the President only 'for cause' rather than at will.

The CFPB sought judicial review with the DoJ's backing. The DoJ filed an amicus brief (a legal document filed in appellate court cases by non-litigants with a strong interest in the subject matter) and in February the court declared its decision void. Since then, however, the DoJ has changed sides on the matter and is now supporting President Donald Trump's anti-regulatory agenda. In a 33-page-long amicus brief issued on the side of PHH, it argued last week that "limitations on the president’s authority to remove a single agency head are a recent development to which the executive branch has consistently objected...under the Constitution and Supreme Court precedent, the general rule is that the president must have authority to remove executive branch agency heads at will." By then, PHH had filed its own en banc brief and had been supported by seven trade bodies, representing thousands of financiers, with oral arguments timed for 24 May. The outcome is unpredictable, with the CFPB referring to the case as "the most important separation of powers case in a generation."

Last summer the bureau claimed that its actions over its first five-year period had resulted in $11.7 billion in relief for consumers who had sustained 'harm.' The CFPB's finest hour probably came in September last year when it fined Wells Fargo Bank $100 million for the widespread illegal practice of secretly opening unauthorised deposit and credit-card accounts. Spurred on by sales targets and compensation incentives, employees boosted sales figures by covertly opening accounts and funding them by transferring funds from consumers’ authorised accounts without their knowledge or consent, often racking up fees or other charges. According to the bank’s own analysis, employees opened more than two million deposit and credit card accounts that may not have been authorized by consumers. Wells Fargo also had to pay full restitution to all victims, $35 million to the Office of the Comptroller of the Currency, and another $50 million to the City and County of Los Angeles.

Wells Fargo’s staff also trangressed by doing the following.

• Applying for credit card accounts without authorisation. According to the bank itself, its employees applied for roughly 565,000 credit card accounts that customers may not have authorised. On those cards, many consumers incurred fees and associated finance or interest charges.
• Issuing and activating debit cards without authorisation, going so far as to create personal identification numbers (PINs) without telling consumers.
• Creating bogus email addresses to enroll consumers in online banking services.