President Donald Trump on Friday named White House Budget Director Mick Mulvaney acting director of the Consumer Financial Protection Bureau, setting up a legal clash over who is in charge of the controversial agency.
The announcement came just hours after outgoing CFPB Director Richard Cordray appointed the agency’s chief of staff, Leandra English, as deputy director, establishing her as his successor as he steps down today.
The two moves plunged the agency into confusion over the leadership of the bureau, which was established in the wake of the financial crisis and has become a lightning rod for attacks by Republicans and business executives for its aggressive enforcement.
“The President looks forward to seeing Director Mulvaney take a common sense approach to leading the CFPB’s dedicated staff, an approach that will empower consumers to make their own financial decisions and facilitate investment in our communities,” the White House said in a statement Friday night.
“Director Mulvaney will serve as Acting Director until a permanent director is nominated and confirmed,” the statement said.
The 2010 Dodd-Frank Act, which created the CFPB, explicitly says the consumer bureau’s deputy director shall “serve as acting Director in the absence or unavailability of the Director,” giving the edge to English.
Yet the Federal Vacancies Act allows the president to install a temporary acting head of any executive agency who has already been confirmed by the Senate to another position, like Mulvaney has as leader of the Office of Management and Budget.
Still, the Vacancies Act says that an opening may also be filled if another law “expressly … designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity.”
It doesn’t say whether one approach supersedes the other, something the courts will likely have to sort out.
Today’s actions were the latest drama engulfing an agency that Republicans have targeted since its inception. GOP lawmakers and bankers say the consumer bureau regulates through enforcement rather than rulemaking and that its single director has unconstitutional power.
Mulvaney himself, while in Congress, savagely attacked the bureau, calling it in 2014 “a wonderful example of how a bureaucracy will function if it has no accountability to anybody.” He added that the CFPB has been a “sick, sad” joke.
Cordray fired the first shot earlier today when he abruptly announced that he would leave at the end of the day, speeding up his original timetable of departing at the end of the month, which he disclosed on Nov. 15.
“Upon my departure, [English] will become the acting Director pursuant to section 1011(b)(5) of the Dodd-Frank Act,” Cordray said in a note to staff.
“In considering how to ensure an orderly succession for this independent agency, I determined that it would be best to avoid leaving this key position filled only in an acting capacity,” he added. “In consultation over the past few days, I have also come to recognize that appointing the current chief of staff to the deputy director position would minimize operational disruption and provide for a smooth transition given her operational expertise.”
In his resignation letter, he called serving as the CFPB’s first director “one of the great joys of my life,” saying the agency has returned nearly $12 billion to more than 30 million consumers.
Cordray has been rumored to be considering a run for governor of Ohio but has given no indication of his future plans.
“[I]n departing I now look forward to finding further ways to continue to advocate for those who are facing economic anxiety and uncertainty in their lives,” he said.
English would officially take the role that has been filled on an acting basis since 2015, most recently by David Silberman, who will continue to serve as CFPB’s associate director of research, markets and regulations.
She has held several leadership positions at the CFPB, including deputy chief operating officer, acting chief of staff, and deputy chief of staff.
“Leandra is a seasoned professional who has spent her career of public service focused on promoting smooth and efficient operations,” Cordray said in his statement. “As deputy director, we will continue to benefit from Leandra’s in-depth knowledge of the operational needs of this agency and its staff.”
English has also previously held senior positions at the Office of Management and Budget and the Office of Personnel Management.
Financial companies, which have long criticized Cordray as overly aggressive, decried the move.
“Today’s actions by former CFPB Director Richard Cordray in appointing his own Acting Director to lead the bureau reinforces the problematic nature of having a single and completely unaccountable leader,” said Chris Stinebert, head of the American Financial Services Association, which represents installment lenders, in a statement.
“The decision to choose who should lead the country’s consumer protection agency, and confusion that’s been caused by Cordray’s own ‘succession plan,’ should not be made by one individual and for this reason AFSA has long advocated the need for a bipartisan commission,” he added.
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