Politics & Policy

Trump’s in the Right in CFPB Tiff

Mick Mulvaney (Kevin Lamarque/Reuters)
The law gives him the authority to appoint an acting director.

Some legal questions are tough. The question of who should lawfully be considered the acting director of the Consumer Financial Protection Bureau is not one of them. President Trump unquestionably has the power to name Mick Mulvaney (his Senate-confirmed budget director) to the position, and he has done so. The lawsuit seeking to block this appointment, filed by the CFPB’s deputy director Leandra English — who hopes to take the job herself — is frivolous and offensive.

The CFPB is an unconstitutional monstrosity that ought to be abolished. Indeed, the current tiff is but a symptom of the underlying disease: The political progressives who created the CFPB sought to make it an “independent” agency, beyond political accountability and inter-branch checks and balances. It would be a boon if the dust-up over the acting leadership of the agency would spur a case that could invalidate the entire enterprise.

That is unlikely, though, so let’s stick to the narrow, easy question before us.

The CFPB, brainchild of former Harvard law professor (now senator) Elizabeth Warren, was rammed through by the Democrat-dominated Congress in 2010. Under the statute creating the CFPB (section 5491 of Title 12, U.S. Code), the director is appointed by the president with the advice and consent of the Senate, and the deputy is appointed by the director.

There was partisan infighting over leadership of the agency. Finally, in January 2012, President Obama unconstitutionally installed Cordray as a “recess appointment” despite the fact that the Senate was not actually in recess. Cordray was nevertheless confirmed in 2013, and he failed to fill the deputy position after it became vacant in August 2015. The acting deputy was David Silberman. Leandra English was Cordray’s chief of staff. On his last day in office, Cordray abruptly appointed English as deputy.

As his aggressive stewardship of the CFPB demonstrated, Cordray is a progressive zealot, deeply opposed to the Trump agenda of rolling back regulations. The English appointment was so sudden that, as this is written, the CFPB has not had time to post English’s bio on the agency website. There is just a press release announcing the appointment.

We’d call this sleight of hand, but there was nothing hidden: Cordray was quite explicitly attempting to ensure that he, rather than the president, would choose his successor. Under the aforementioned CFPB statute, the deputy director serves as the director “in the absence or unavailability of the director.” Cordray was paving the way for English to argue that his resignation as director creates an “absence or unavailability” that makes her the director as a matter of law.

This is an absurdly strained reading of the statute. What Cordray has created is a vacancy. He is not merely absent or unavailable in the commonsense, temporary understanding of these words; he is gone. Nonetheless, as the Justice Department’s Office of Legal Counsel explains in a persuasive memorandum, even if we assume that English is correct that a vacancy qualifies as an “absence or unavailability” under the statute, this does not constrain the president’s authority to name a different, qualified official to the position of acting director.

Although its progressive champions tout it as “independent,” the CFPB statute explicitly establishes it as an “Executive agency” as that term is defined by federal law. (The definition, in section 105 of Title 5, U.S. Code, includes “independent establishment[s].”) Under the so-called Vacancies Act (i.e., the Federal Vacancies Reform Act of 1998), “if an officer of an Executive agency . . . whose appointment to the office is required to be made by the President, by and with the advice and consent of the Senate, . . . resigns,” the president has the authority to name as acting director a currently serving federal officer who has been confirmed by the Senate.

As the Justice Department elaborates, even when there is an office-specific statute that provides for succession, as the CFPB statute arguably does, the president maintains the option of instead filling the position in accordance with the Vacancies Act. Consequently, while President Trump could permit deputy director English to become acting CFPB director, he is not required to do so.

President Trump clearly has the authority to appoint Mulvaney as acting CFPB director.

Budget director Mick Mulvaney was confirmed by the Senate in February. He is a conservative opponent of stifling government regulation. This, along with his similarly dim view of government debt, is why Democrats closed ranks in opposition to his appointment as budget director. (He was confirmed by a razor-thin 51–49 margin.) It also explains why the thought of Mulvaney at the helm of their beloved CFPB horrifies the media-Democrat complex.

Nevertheless, the political rancor does not complicate the legal question. President Trump clearly has the authority to appoint Mulvaney as acting CFPB director.

Moreover, deputy director English ought to be fired for insubordination. No matter how one feels about President Trump, he is the head of the executive branch. He has the authority to fire the heads of executive agencies at will. The Obama Democrats’ attempt to create an “independent” executive agency whose Obama-anointed director could be removed only for cause violates the Constitution. It is curious that Trump did not remove Cordray, but he has plainly complied with federal law in appointing Mulvaney on an acting basis. It is outrageous that a subordinate executive branch official is suing the chief executive over a personnel decision.

The fact that Leandra English thinks she has an “independent” leg to stand on illustrates why the CFPB, a constitutional chimera, should be eliminated.


Richard Cordray Delivers CFPB’s Punchline

Richard Cordray’s Tempest in a Teapot

The Tragic Downfall of the Consumer Financial Protection Bureau