The Director of the Consumer Financial Protection Bureau (CFPB) resigned last week. Before he left, he appointed Leandra English as Deputy Director, recognizing “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.”
Later that day, Trump appointed the White House budget director Mick Mulvaney as acting head of the CFPB until he could appoint a permanent director with Senate approval. Last night, English filed a lawsuit challenging the appointment, following up this morning with a request for a restraining order to prevent Mulvaney from stepping into the position.
Dueling legal arguments have been flying on Twitter and in the media about the transition. The White House claims the Federal Vacancies Reform Act (FVRA) applies to the appointment of an acting CFPB Director. This act enables the President to make the appointment.
English and those who support her state that it is the Dodd-Frank law that created the CFPB that has precedence in the appointment. A section of the law states that the deputy Directory shall “serve as acting Director in the absence or unavailability of the Director.”
When Congressional laws create a conflict, the newer law, and the more specific, takes precedence. The Dodd-Frank is both newer and more specific (related specifically to the CFPB rather than all agencies, generally). The White House argument is that the laws aren’t in conflict, they exist parallel to each other, which means that the deputy Director would be acting director only if the President doesn’t choose another.
I’m not a lawyer, but it only requires a modicum of logic and commonsense to realize that Trump’s hasty appointment of Mulvaney was ill-thought and will ultimately be counter-productive.
English does have a stronger case, regardless of White House opinion or even concurrence from the CFPB’s own legal counsel, Mary MacLeod. The parallel construction MacLeod and the White House rely on makes sense with the agencies listed in the arguments (Department of Justice, Energy, and Education), because these are agencies where the department heads serve at at the President’s pleasure—he can fire them whenever he wants. So it doesn’t matter who is temporarily filling in for the position as the President can fire the person whenever he wants. These agencies are not independent of the President.
The CFPB is. The Director serves a five year term regardless of President. We’re in this pseudo-Constitutional crises because Trump specifically cannot fire the Director of the CFPB without specific cause, but he’s doing so, in effect, by appointing Mulvaney over English.
So the parallel construction just doesn’t work in these circumstances.
Consider also the intent of the legislation creating the CFPB. There’s no doubt that the agency was intended to be independent if the President cannot fire the Director whenever he or she wants. This was the legislative intent. Trump has literally encroached on this legislative intent with his appointment of Mulvaney. Frankly, if President Obama had done something similar, Congressional Republicans would be having hissy fits claiming “executive overreach”.
The major reason why this is executive overreach is that Trump can appoint Mulvaney as acting Director and then just not bother to formally appoint a successor until just before the 210 day mark for the CFPB vacancy. At that point, Trump can appoint Tiffany Trump to the position, triggering a rejection in the Senate…and Mulvaney can serve another 210 days.
This means that the Senate would not have the ability to confirm or deny the appointment for over 400 days. Longer, if the President doesn’t appoint another successor, or nominates someone guaranteed to be rejected by the Senate. At that point, Mulvaney could no longer serve as acting Director, but Trump could appoint another individual as acting Director because the position is still vacant and the courts ruled that the FVRA applies.
This also means that the CFPB would no longer operate independently during the Trump presidency because the acting Director is operating at the pleasure of the Presidency. Trump can, in effect, fire the acting Director because he can appoint the acting Director. So if Mulvaney pisses Trump off, he can be fired from the OMB, and replaced as acting Director at the CFPB…in effect be fired from the CFPB. He can do so because the courts are allowing him to replace an acting Director by allowing Trump to replace English with Mulvaney.
Regardless, even if the courts don’t buy any of this and rule in favor of the Mulvaney, the White House will still not win. The irregularity of Mulvaney’s appointment, the obvious loss of agency independence, will taint all future actions, making them that much more vulnerable to court challenge. Frankly, I don’t think the White House could win any of these court challenges, especially if Trump delays appointing a successor.
Trump created a mess by appointing Mulvaney. Ruling in favor of Trump and Mulvaney won’t clean this mess up. The courts would best serve us by ruling in favor of English, encouraging Trump to appoint a formal successor for the position as soon as possible if he’s unhappy with English.
Brilliant takes on this fooflah by people who are lawyers
- Who’s the acting Director of the CFPB? Understanding the legal dispute at the center of the kerfuffle
- More Thoughts on the CFPB Puzzle: President Trump Can Select Someone to Run the CFPB Only if the Senate Has an Opportunity to Confirm, by Nina A. Mendelson
- English or Mulvaney at the CFPB? Time for quo warranto!
- OLC Legal Opinion and the Missing Legislative History
- Legal Malarkey from the White House about the CFPB Putsch
The court case has been assigned to Judge Timothy Kelly, who was appointed by Trump.
The Judge has ordered the parties to meet in court today at 4:30 AM Eastern time.
“MINUTE ORDER: The parties shall appear for a hearing on Plaintiff’s 2 Motion for a Temporary Restraining Order today, November 27, 2017, at 4:30 p.m. in Courtroom 11. If the parties wish to reschedule the hearing for a later date, they shall confer and jointly contact chambers today by 3:30 p.m. with a mutually agreed upon date and time. (lctjk1) (Entered: 11/27/2017)”
Several members of Congress just filed a motion for leave to file Amici Curiae in the court case. You can read the proposed Amici Curiae document.
One of my Constitutional goto guys, Laurence Tribe, has come out with his take on the fooflah.
But CFPB’s general counsel, Mary McLeod, in her own Nov. 25 memo, offers a wholly incongruous legal gloss. She doesn’t rebut OLC’s concession that the vacancy created by Cordray’s resignation triggers the agency-specific succession provision of Dodd-Frank — but she doesn’t exactly accept it, either. Instead, she toys with various definitions of “unavailability” as she attempts to advance the idea that the director’s resignation makes his status something other than “unavailable” (an alternative status she never quite articulates), winding her way to the notion that Congress may have intended “unavailability” to mean something temporary, not permanent.
Ultimately, as all these fine minds note, if Congress had wanted the FVRA to hold with the CFPB, they wouldn’t have made a separate provision for succession in Dodd-Frank. However, I’m concerned about the fact that this case is being heard by a very new Trump appointed Judge.
The feasible thing for him to do would be to restrain Trump’s appointment of Mulvaney until fuller arguments could be heard. By that time, Trump would most likely have an appointment made, and the post would be moot.
By not waiting, Trump has no intention of appointing a permanent replacement until he absolutely has to. That way he can maintain tightfisted control over the the independent agency.
What a cluster f**k.