Setting up a high-stakes legal and political battle, President Trump and CFPB Director Richard Cordray each designated an acting director for the agency following Cordray’s departure Friday.
In a parting shot at the Trump Administration, Cordray announced he was resigning effective Friday and designated Leandra English as acting director of the agency – attempting to head off an effort by Trump to appoint an acting director himself. English is the agency’s chief-of-staff.
But Trump then designated Office of Management and Budget Director Mick Mulvaney to run the agency on an acting basis.
By Friday evening, it was unclear who was in charge of the agency.
The dispute is a particularly high-stakes fight since any Trump choice would likely put the brakes on the aggressive enforcement of Dodd-Frank that has marked the Cordray era.
On the other hand, a Cordray choice likely would continue that enforcement.
At issue is the interpretation of two federal laws.
Dodd-Frank states that the agency’s deputy director serves as the agency’s director in the “absence or unavailability” of the director. However, the law does not specify if absence or unavailability includes a vacancy that occurs when the director resigns.
Cordray apparently is relying on the Dodd-Frank language to designate English as the acting director.
On the other hand, the Federal Vacancies Act allows the president to appoint an acting director at an agency as long as the person designated has already been confirmed by the Senate for another position.
That person could serve for up to 210 days or as long as a permanent nomination is pending before the Senate.
The Trump Administration was apparently relying on that law in appointing Mulvaney as the agency head.
On Friday afternoon, while most of official Washington was celebrating the holiday weekend, Cordray announced Friday was his last day. And before he left office, he designated English as deputy director.
David Silberman had been serving as acting deputy director. When Cordray announced he was leaving the agency, there were questions about whether an acting deputy director could take the reins of the agency.
In appointing English as deputy director, Cordray apparently sought to answer that question.
“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,” Cordray wrote in a note to agency staff Friday. “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.”
But later on Friday, Trump announced Mulvaney as acting director.
“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 announcing the Mulvaney appointment.
As a House Republican from South Carolina, Mulvaney sponsored legislation to abolish the CFPB and several other measures that would have greatly curtailed the agency’s powers.
Any Trump Administration nominee for CFPB director likely would provoke a long confirmation fight in the Senate, so it is likely that any acting director could serve for quite a while.
