Stage Set for Dueling Dual Directors

It should be an interesting day at the Consumer Financial Protection Bureau (CFPB). In fact, the Federal Reserve, which is charged with funding the agency out of its budget, might consider selling both tickets and popcorn in the CFPB parking lot if, as expected, two different, and supposedly legally appointed acting directors, show up, vying to sit in the same chair.

As MND reported on November 16, Richard Cordray, the first director of the agency, told his staff via an internal memo that he would be resigning by the end of the month. He did so officially on Friday, appointing his chief of staff, Leandra English to the agency's number-two position, deputy director, then naming her as the agency's acting director. Cordray did this under authority of the 2010 Dodd-Frank Wall Street Reform and Consumer Financial Protection Act, which established the agency.  That act states that the deputy director will become the acting head "in the absence or unavailability of the director."

However, Donald J. Trump almost immediately named the current Director of the Office of Management and Budget (OMB), Mick Mulvaney as acting director under the authority of the Federal Vacancies Reform Act.  Mulvaney, a vocal critic of CFPB, he once called the agency a "sad, sick joke," would serve until a permanent successor is confirmed by the Senate, and is expected to essentially dismantle it.  Cordray's 2012 appointment was to a five-year term which will not expire until next summer.  He could only be removed from his post for cause.

Late Sunday, English filed a Complaint for Declaratory and Injunctive Relief in the U.S. District Court in the District of Columbia.  She names as defendants Trump "in his official capacity as President" and Mulvaney "in his capacity as the person claiming to be acting director" of CFPB. The suit asks for a temporary restraining order to block Mulvaney from taking over the bureau.

The White House said it had authority to appoint an interim director, citing an opinion, issued Saturday by the Department of Justice's Office of Legal Counsel, that the president has authority under the Vacancies Reform Act despite the Dodd-Frank statute. 

Former congressman Barney Frank, who co-authored Dodd-Frank, told NPR that Congress very deliberately set up the succession to insure the very independence that the current Congress has said it plans to end.  Frank's contention was validated by Georgetown law professor Adam Levitin who told The Intercept that the version of the Dodd-Frank Act passed by the House had explicitly applied the Vacancies Act to the CFPB, but that the House Senate conference committee had stripped out that language from the version that ultimately passed into law.

Levin goes on to say that the Vacancies Reform Act itself states that it doesn't apply to agencies where "a statutory provision ... designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity."

Mulvaney said Sunday night that he does not expect any problem when he shows up to take over the CFPB on Monday morning.  The suit filed by English makes it clear the matter is headed to court.