Dueling Appointment Clash at the Consumer Financial Protection Bureau

[brucejoel99]

Yesterday, November 24, 2017, Richard Cordray, Director of the Consumer Financial Protection Bureau, appointed Leandra English to the position of Deputy Director, & announced that he'd leave office at the close of business yesterday.

Before the close of business, President Trump appointed Mick Mulvaney, Director of the Office of Management & Budget, as Acting Director, citing the authority of the Federal Vacancies Reform Act of 1998.

However, the FVRA states that a vacancy can be filled by means other than a Presidential appointment if the law establishing an executive agency "expressly … designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity".

§1011(b)(5) of Dodd-Frank provides that the Deputy Director assumes the office of Acting Director if the Director is "absent or unavailable", but it doesn't stipulate that the Deputy Director assumes the office of Acting Director if the Director resigns.

Discuss.

[brucejoel99]

Well, if there are no other takers, then here's my take on this...

To preserve the CFPB's independence, Congress, via Dodd-Frank, provided that in the event of a vacancy, the Bureau's Deputy Director, appointed by the Director, would serve as acting Director of the Bureau until a new Director was named by the President & confirmed by the Senate. In the language of the Act, the Deputy Director "shall ... serve as acting Director in the absence or unavailability of the Director." In other words, if the Director is "absen[t]," that is, "not existing," the Deputy Director is acting Director. Before resigning, Cordray appointed English Deputy Director, which means that English is required to "serve as acting Director until there's a new Senate-confirmed head for the Bureau.

But, of course, President Trump has announced that he's naming Mulvaney to serve as the Bureau's new interim head. To be sure, the FVRA provides that the President generally "may direct a person who serves in an office for which appointment is required to be made by the President, by and with the advice and consent of the Senate, to perform the functions and duties of [a] vacant office temporarily in an acting capacity," subject to certain time limits. Having been confirmed by the Senate to be OMB Director, Mulvaney meets these criteria.

However, I personally believe that, unfortunately for the White House, & fortunately for the American people, the FVRA doesn't apply here.

LEGAL REASONING:

• 1) The plain text of Dodd-Frank, which is mandatory, provides that the Bureau's Deputy Director "shall" serve as acting Director. On top of that, Dodd-Frank was enacted more recently than the FVRA. Moreover, its language here is more specific than that of the FVRA, focusing narrowly on the head of one particular agency, as opposed to supplying general rules for all executive offices. As the Supreme Court has explained more than once, "'(I)t is a commonplace of statutory construction that the specific governs the general.'"
• 2) Concluding otherwise (that the FVRA trumps Dodd-Frank's mandatory language) undermines Congress' overall statutory plan for the CFPB. Congress determined that the Bureau needs to be independent to be an effective regulator. If the President can appoint his own chosen successor pursuant to the FVRA, it'd mean that the CFPB could be headed (potentially for many months) by an acting Director hand-picked by the President w/out the check of Senate confirmation. That interpretation would thus deprive the CFPB of the independence that was central to Congress' plan in establishing the Bureau.
•     2(a): Nearly all independent agencies are structured so as to prevent Presidents from achieving what President
       Trump's attempting here: most independent agencies are headed by multi-member boards or commissions, &
       the authorizing statutes for those agencies don't provide for the temporary replacement by the President of
       board members or commissioners who leave office before the end of their terms. The FVRA similarly withholds
       from the President the authority to temporarily replace board members & commissioners of multi-member
       independent agencies. (Notably, such agencies can continue to function while awaiting the appointment of a new
       Senate-confirmed member, unless a quorum's lost.) The legislation creating the Federal Housing Finance Agency,
       an independent agency that like the CFPB is led by a single director, similarly restricts the President's choice of a
       temporary replacement when the director leaves office: the President's limited to choosing among 3 existing
       Deputy Directors of the agency. These considerations bolster what the plain text of Dodd-Frank already
       suggests: the Deputy Director of the CFPB automatically becomes acting Director in the event of a vacancy, &
       the President doesn't have authority under the FVRA to make his own choice of acting Director instead.
•          2(a)(1): The legislative history of Dodd-Frank supports this interpretation. The bill that passed the House of
            Representatives in December 2009 didn't provide for a Deputy Director of the CFPB. Instead, it explicitly
            stated that when the Director's office became vacant, a temporary replacement had to be appointed in the
            manner provided by the FVRA. The Senate bill introduced & passed months later, the language of which
            prevailed in conference, was the origin of the present statutory language. The change reflects Congress'
            considered decision that the FVRA shouldn't govern succession in the event of a vacancy in the Director
            position; instead, as the language of the statute as enacted suggests, the Bureau's 2nd-in-command should
            take over until a new Director is appointed by the President & confirmed by the Senate.
• 3) It's irrelevant that Dodd-Frank doesn't expressly refer to a vacancy in the office of the Director, but instead refers more generally to "the absence or unavailability of the Director." While some statutes governing succession in office refer explicitly to vacancies, the legislators who drafted & voted on Dodd-Frank chose broad language ("absence or unavailability") that naturally covers situations in which a CFPB Director has left office. Moreover, Dodd-Frank provides that the Deputy Director shall "serve as acting Director," thus using the same language the FVRA uses when it makes clear that agency organic statutes can provide their own order of succession, notwithstanding the FVRA default rule. By tracking that language, Congress signaled its intent to place the CFPB within that exception to the FVRA's default rule.

So in sum, I personally believe that, under Dodd-Frank, now that Cordray has resigned as Director, the CFPB's Deputy Director is the Bureau's acting Director. President Trump may decide he doesn't care what Dodd-Frank says, but he doesn't get the final say. If there ends up being a dispute about who's the rightful head of the CFPB, the final say will rest w/ the courts. And if the courts follow the text, structure, & history of Dodd-Frank, it's clear what they should say: English is currently the acting Director of the CFPB.

[President Punxsutawney Phil]

While I know little about this and don't have expertise on this, I find this an interesting situation regardless.
How soon till this likely ends up in court?

[brucejoel99]

While I know little about this and don't have expertise on this, I find this an interesting situation regardless.
How soon till this likely ends up in court?

As early as this evening or tomorrow morning lol... English herself will be suing the Trump administration to block the Mulvaney appointment by filing English v. Trump in the U.S. District Court for the District of Columbia, along w/ seeking an injunction ordering President Trump to halt the Mulvaney appointment.

[President Punxsutawney Phil]

While I know little about this and don't have expertise on this, I find this an interesting situation regardless.
How soon till this likely ends up in court?

As early as this evening or tomorrow morning lol... English herself will be suing the Trump administration to block the Mulvaney appointment by filing English v. Trump in the U.S. District Court for the District of Columbia, along w/ seeking an injunction ordering President Trump to halt the Mulvaney appointment.

Expedited case! Expedited case!
*passes the popcorn*

[NewYorkExpress]

Can Trump even appoint Mulvaney as acting director without Mulvaney resigning as OMB director?

[brucejoel99]

Can Trump even appoint Mulvaney as acting director without Mulvaney resigning as OMB director?

Yeah, the Federal Vacancies Reform Act provides that the President generally "may direct a person who serves in an office for which appointment is required to be made by the President, by and with the advice and consent of the Senate, to perform the functions and duties of [a] vacant office temporarily in an acting capacity," subject to certain time limits. Having been confirmed by the Senate to be OMB Director, Mulvaney meets these criteria. So yes, if the FVRA did apply here (even though I personally believe it doesn't), President Trump could name Mulvaney to serve as the Bureau’s new interim head.

[dead0man]

The CFPB's own top lawyer thinks Trump is correct.

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But this is why we shouldn't have finacial regulators with no democratic oversight.  From Reason

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[brucejoel99]

The CFPB's own top lawyer thinks Trump is correct.

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True, but even as McLeod's memo was circulating, English still did sue the Trump administration in U.S. District Court in Washington.

In her lawsuit filed late Sunday, she named Trump & Mulvaney as defendants & asked the court to establish her authority as acting director.

Per the filing, "Ms. English has a clear entitlement to the position of acting director of the CFPB. The President's purported or intended appointment of defendant Mulvaney as acting director of the CFPB is unlawful."

English is being represented in court by Deepak Gupta, a former senior counsel at the bureau, & the lawsuit was filed by English in her capacity as deputy director and acting director of the CFPB.

Of course, however...

The court has sided w/ Trump in the CFPB leadership dispute.

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And while this ruling can't challenged, Gupta told reporters that he'll be consulting w/ English about the next steps. These would either involve seeking a preliminary injunction or requesting a ruling on a permanent injunction, either of which *could* be appealed to a higher court.