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In Growing War Over CFPB Leadership, Chief Counsel Says Trump Has Authority To Appoint Director

Courtesy of ZeroHedge. View original post here.

It’s been two days since former CFPB Director Richard Cordray resigned his post and named Deputy Director Leandra English as his successor, setting the agency up for what looks to be a brief but noisy legal dogfight. As was widely expected, English, who had formerly been Cordray’s chief of staff before he named her deputy director on his way out the door, filed a lawsuit late Sunday against President Trump to block Office of Management and Budget Director Mick Mulvaney from taking over as acting director of the agency

English's lawsuit has already triggered a widespread backlash from the legal community, including from the agency's chief counsel, who has said the law stipulates that Mulvaney should be allowed to take the reins. The CFPB is unique among government agencies in that the Dodd-Frank act allowed it a small measure of independence, as English pointed out in her lawsuit.

Cordray said he made English, a senior CFPB official, the deputy director specifically to bridge the divide between his tenure and Trump’s director pick, according to the Hill. Trump officially nominated Mulvaney, a decision that was widely expected, shortly after Cordray named English as his successor.

Mick Mulvaney

“The president may not, consistent with the statutory requirement of independence, install a still-serving White House staffer as the acting head of an independent agency."

English also claimed that she is the rightful acting director of the CFPB, and that the court should bar Mulvaney from running the agency in her stead – an argument that’s been widely criticized by legal experts. English claims that the provisions of the Dodd-Frank Act that outline the CFPB’s line of succession supersedes the Federal Vacancies Act, which Trump used to nominate Mulvaney without needing to first seek approval from Congress.

“The president’s purported or intended appointment of defendant Mulvaney as Acting Director of the CFPB is unlawful,” the complaint reads. The suit calls Trump’s use of the Vacancies Act “an obvious contravention of Congress’s statutory scheme” that “cannot be reconciled with Dodd-Frank’s mandatory language."

The crux of the legal dispute involves language in the Dodd-Frank act – which established the CFPB back in 2010 – that contradicts the Federal Vacancies Reform Act of 1998, as Politico explains. One factor working in English’s favor is that there’s no legal precedent: Cordray had managed the agency since it was created in 2010 – though it took three years for the Obama administration to win Congressional approval for Cordray.

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.

As noted above, most legal experts – including, bizarrely, the CFPB's chief counsel – have argued that the Vacancies Act trumps (no pun intended) the language in the Dodd-Frank bill, meaning that the president’s pick has every right to run the agency. Mary McLeod, the agency’s chief counsel, intends to contest English’s lawsuit in court.

"As General Counsel for the Bureau, it is my legal opinion that the President possesses the authority to designate an Acting Director for the Bureau," McLeod wrote in a memo from Nov. 25, according to Politico. "I advise all Bureau personnel to act consistently with the understanding that Director Mulvaney is the Acting Director of the CFPB," she continued.

The DOJ’s interpretation of the law would also allow Mulvaney to assume control of the agency immediately. However, these interpretations likely won’t deter English from pushing ahead with the lawsuit. That said, her legal maneuvering appears to be a transparent, stalling tactic, a last-ditch effort to save her job in the hopes that her Democratic allies in Congress somehow summon the wherewithal to intercede on her behalf, or that the district court might rule in her favor, a decision that would likely be challenged by the administration, potentially launching a years-long legal battle. 


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