Richard Cordray. the head of the Consumer Financial Protection Bureau, said that he would be leaving as head of the CFPB at the end of this month. Last Friday, November 24, he sent a letter to President Trump, declaring that he’s officially done leading the federal government’s controversial consumer watchdog agency once the clock strikes midnight.
In a separate letter to his staff, Cordray, who is the first-ever director of the fledgling CFPB, announced that chief of staff Leandra English will serve as the bureau’s acting director.
Shortly after Cordray’s announcement Friday, President Trump named Office of Management and Budget Director Mick Mulvaney as the CFPB’s interim director. The back-to-back moves set up a clash over who is in charge of the bureau. Mulvaney, like many Republicans, has been a staunch critic of the CFPB. While serving in Congress, he voted in favor of killing the agency. He and other opponents argue the agency — which was created in the wake of the 2008 financial crisis to keep an eye on Wall Street — has too much power and installs unduly harsh regulations.
During his conf hearing to be OMB director back in Jan 2017, Mulvaney called CFPB “they very worst kind of gvt entity”
h/t @SZilberstein pic.twitter.com/Nve3y5oXoP
— Mark Murray (@mmurraypolitics) November 27, 2017
In a tweet Friday night, Senator Elizabeth Warren, an architect of the consumer agency, said that under the Dodd-Frank financial reform law, the agency’s deputy director assumes the role of acting director if there’s a vacancy.
Sunday night, lawyers for Leandra English, filed a lawsuit in the US District Court for the District of Columbia seeking to halt the appointment of Mick Mulvaney, who serves as head of the Office of Management and Budget and is also named in the lawsuit.
Which brings us to today, the first workday since the whole thing broke.
Both Mulvaney and English were present at the CFBP this morning. Mulvaney was given full access to the CFPB director’s office with “full cooperation” from its staff, a senior White House official told CNN, adding that the OMB director brought doughnuts for his new staff. English, according to a source familiar with the matter, also was present at the bureau Monday morning, but it was not immediately clear if she and Mulvaney interacted. Mulvaney’s communications director tweeted a photo of his boss “hard at work” in his new position.
Mulvaney running the CFPB is the most literal interpretation of “fox guarding the henhouse” possible. That said, it is typical for the Trump Administration, that puts climate change deniers in charge of the EPA, or Secretary of State Rex Tillerson slowly dismantling the State Department. But unfortunately, the law does not turn on who would be best for the CFPB.
Who’s right? Unfortunately, one needs to get into the weeds to figure that out. This memo by Mary MacLeod, general counsel of the CFPB, does a good job laying out both sides of the legal argument, which turns on whether the position is open due to the “absence” or “vacancy” of the former director. She concludes that the position properly belongs to Mulvaney:
It is a convincing argument, but not everyone agrees
I’ve now read the 3-pg internal memo dated 11/25/17 by Mary McLeod supporting @POTUS’s power to override the specific Dodd-Frank provision making Leandra English Acting Director of CFPB. The memo must’ve been written in great haste. It’s weakly reasoned and wholly unconvincing.
— Laurence Tribe (@tribelaw) November 27, 2017
I’m not questioning McLeod’s motives — though I’ll admit your explanation crossed my mind — only the shoddiness of her pro-Mulvaney work product. It’s really VERY poor work indeed, even as a piece of advocacy. As a genuine analysis, well, it’s frankly awful. https://t.co/kLvjT5yfSk
— Laurence Tribe (@tribelaw) November 27, 2017
Rep. Barney Frank, D-Mass., a lead author of the Dodd-Frank Act, which created the CFPB, had this to say:
The president still has the ability to appoint a successor, said Frank, but only one who would not destroy the agency, as such a nominee would not get through the Senate. “The way it works, the acting director stays in until a confirmed successor appointed. I don’t think the Senate would confirm someone like Mulvaney, who would destroy the agency. Remember, Sen. Collins is in there and she voted for it. Republicans would like to get rid of the agency legislatively, but they don’t have the votes,” he said.
Former Rep. Brad Miller, D-N.C., the lead champion of the CFPB provision in the House, also said it was the intent of the bill’s authors to keep the acting director independent of the president. “We were very much about the task of trying to create an independent agency that would not be captured by its opponents,” he said. “The statute’s pretty clear. What happens if there’s a vacancy in the director’s spot, the deputy director steps up and serves until the Senate confirms a replacement.”
The OLC, in the memo filed [over the weekend], to its credit, admits that the references to unavailability and absence encompass vacancy. They’re not trying to argue that the statute doesn’t cover this. They’re trying to have it both ways. They’re arguing that the president retains an option under the Federal Vacancies Reform Act to override subsequent legislation. They’re trying to have half a loaf and make it a whole loaf. It’s an interesting position but it collapses on itself. It’s completely incoherent. Laws are not typically written that way.
Senate Minority Leader Chuck Schumer, D-N.Y., pushed back against the Mulvaney pick. “The process for succession laid out in Dodd Frank is clear: Leandra English, not Mick Mulvaney, is the acting director of the CFPB. By attempting to install Mr. Mulvaney as director, the Trump administration is ignoring the established, proper, legal order of succession that we purposefully put in place, in order to put a fox in charge of a hen house,” he said in a statement.
The courts will have the last say.
UPDATE: Press secretary Sarah Sanders insists that Mulvaney is in charge of the CFPB
"Elections have consequences at every agency, and that includes the CFPB," says Mick Mulvaney, acting director of the Consumer Financial Protection Bureau.
— Steve Peoples (@sppeoples) November 27, 2017