WASHINGTON — The Trump administration gave the first clear sign Thursday that it intends to dismiss Consumer Financial Protection Bureau Director Richard Cordray.

Although Cordray has a term that stretches until July 2018, Trump interviewed former Rep. Randy Neugebauer, R-Texas, for the CFPB spot on Wednesday, senior Trump spokesman Sean Spicer told reporters on a conference call, according to a report by Huffington Post.

Exactly how President-elect Donald Trump intends to get rid of Cordray is unclear. Under the Dodd-Frank Act, Cordray can only be fired "for cause," and some speculate that the Trump administration is already building a case against the CFPB chief. One source with knowledge of the situation told American Banker that the Trump administration may reach out directly to Cordray to give him the opportunity to resign without being fired.

Cordray would face a tough choice — whether to leave voluntarily without a public fight over his job, or face a hostile Trump administration bent on removing him.

"There's no doubt in my mind that Trump is going to fire Cordray because he wants to put in his people, but it's not going to be that simple," said Joann Needleman, an attorney at Clark Hill PLC. "They are going to have a battle on their hands."

A CFPB spokeswoman declined to comment on this article, though in the past the agency has said Cordray has no intention of resigning.

Firing Cordray also presents risks to the Trump administration. For one, the definition of what "cause" can be used to justify dismissing Cordray is unclear.

"If Trump fires Cordray for cause, then it will get very interesting to see whatever trumped up cause the president comes up with," said Adam Levitin, a law professor at Georgetown University, who has defended the bureau.

Two Republicans have already publicly urged Trump to jettison Cordray, though they argued that the president-elect should rely on a recent U.S. appeals court decision that struck down the "for cause" language. That decision has been temporarily stayed pending an appeal, but Trump could also go that route in seeking to oust the CFPB director.

Neugebauer, meanwhile, would be well received by Republicans if he were nominated, but is likely to be fiercely opposed by Democrats. The former Texas congressman retired last year, but before that chaired the House Financial Services subcommittee on financial institutions and consumer credit.

"Mr. Neugebauer is uniquely qualified to serve as CFPB Director," said J.W. Verret, an associate professor of law at George Mason University and former chief economist for the full committee. "He has an unparalleled commitment to protecting consumers and ensuring the CFPB operates more effectively and efficiently going forward."

Rep. French Hill, R-Ark., who served with Neugebauer on the committee, also said that the Texan is well suited to alleviate tensions between the bureau and the GOP.

"Congressman Neugebauer has a deep understanding of the problems that have made CFPB a great source of frustration for American consumers," said Hill in an interview on Thursday. "Director Cordray’s CFPB has been completely unaccountable to Congress and has operated as if it has a blank check to produce regulations wherever they see fit, seldom considering the negative economic impacts those decisions will have."

According to the Huffington Post report, which cites a Trump transition source, Neugebauer is the only candidate being considered for the CFPB job so far. The Trump transition did not return calls and emails seeking comment.

Neugebauer ran a small construction and real estate development business in Texas before joining Congress and his son Toby Neugebauer is a billionaire investor and GOP contributor who has been rumored to be under consideration for an ambassadorship under Trump.

During his time in Congress, Neugebauer was a critic of the CFPB, claiming it overstepped its authority.

"Unfortunately, the CFPB's efforts are yet another example of Washington knows best mentality," Neugebauer said during a hearing last February on the CFPB's efforts to rein in payday lenders. "Using behavioral economics… the CFPB has set down a road of paternalistic erosion of consumer product choices and access to credit.”

Some lawyers believe that in the short term, Cordray's future hinges on whether the federal D.C. Circuit agrees before inauguration day to hear an appeal of a contentious court ruling challenging the authority of the CFPB's single-director. A three-judge panel of the D.C. Circuit found in October that the CFPB's structure is unconstitutional, striking down the "for cause" language.

Republicans "want Cordray gone but the case is still on appeal," Needleman said. "Just because [Trump] doesn't like [Cordray} doesn't mean he can fire him."

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