Who’s in Charge at CFPB? The Answer is Unclear

This week, President Donald Trump’s announcement of his choice to head the Consumer Financial Protection Board (CFPB) came with a unique wrinkle that leaves unanswered the question of who is currently in charge of CFPB.

Following the announcement of previous CFPB Director Richard Cordray that he would expedite his announced departure and that last Friday would be his last day on the job, President Trump tasked White House Budget Director Mick Mulvaney with overseeing CFPB, in addition to his duties as Director of the Office of Management and Budget (OMB).

Following Cordray’s announced departure, CFPB announced that its new acting director would be Leandra English, who previously served as CFPB’s chief of staff and is credited with helping stand up the organization in 2010.

The matter is likely headed for a courtroom resolution, with both sides insisting their nominee of choice is the legal successor.

CFPB points to a provision within the 2010 Dodd-Frank Financial Reform Act that, according to Government Executive, “stipulates that the bureau’s deputy director becomes acting CFPB director in the ‘absence or unavailability of the director.”

The Trump Administration, for its part, says that under the 1998 Federal Vacancies Act, the president can designate the acting head of CFPB. The administration claims the 1998 law takes legal precedent over the Dodd-Frank provision.

Thus far, the White House appears to have a solid case, backing its announcement with a memo from the Department of Justice. Mary McLeod, CFPB’s general counsel, also wrote in a memo to CFPB leadership that “the statutory language, legislative history, precedent from the Office of Legal Counsel at the Department of Justice, and case law all point to the conclusion that the president may use the Vacancies Reform Act to designate an acting official, even when there is a succession statute under which another official may serve as acting.” Furthermore, even former Congressman Barney Frank (D-MA), the namesake of the legislation on which CFPB’s argument rests, conceded that the legislation “could have been more specific” in reference to the provision in question.

The dispute made for a tense first day on the job for Mulvaney, who was photographed arriving at the office at 7:30 AM Monday with a bag of doughnuts and greeted by protestors from the group DefendCFPB. Upon starting work this week, Mulvaney sent an e-mail memo advising that CFPB staff should “disregard any instructions you receive from Ms. English in her presumed capacity as acting director. If you receive additional communications from her today…please inform the general counsel.”

The legal debate takes on a new meaning to CFPB supporters, who find cause for concern in Mulvaney’s past response to a question on reforms he would bring to the CFPB, to which he responded, “Well, some of us would like to get rid of it.”

As of Sunday, English had filed an injunction in U.S. district court seeking relief, insisting she is “the rightful, acting director” of CFPB.

 

 

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