The leadership of the CFPB was in the hands of a federal court Monday, after the agency's deputy director filed suit challenging President Trump's right to appoint an interim director.
Leandra English filed the suit contending that she, and not Office of Management and Budget Director Mick Mulvaney should be running the agency after CFPB Director Richard Cordray's resignation Friday.
However, the White House Monday morning released a photo of Mulvaney in the director's office.
The confusion began Friday afternoon, when Cordray appointed English deputy director and then resigned. He and English contend that Dodd-Frank allowed the director to designate an acting director when the director is absent or unavailable.
However, the administration is arguing that the Federal Vacancies Act gives the president the power to appoint an acting director in any agency until a permanent director is confirmed by the Senate.
The Justice Department's Office of Legal Counsel released an opinion Saturday that bolsters the administration's argument.
Ironically, Mary McLeod the CFPB's own general counsel supports that position. “I advise all Bureau personnel to act consistently with the understanding that Director Mulvaney is the Acting Director of the CFPB,” she said in a memo to agency staff.
However, English's suit states, “The President's purported or intended appointment of defendant Mulvaney as Acting Director of the CFPB is unlawful. The President's use of the Federal Vacancies Reform Act to appoint an Acting Director of the CFPB would be an obvious contravention of Congress's statutory scheme.”
She added that allowing Mulvaney to serve as acting director would undermine Congress's intent to ensure that the agency remains independent.
English's suit was filed by Deepak Gupta, a former senior counsel at the CFPB.
CUNA and NAFCU said they continue to support legislation that would convert the CFPB into a commission rather than an agency run by a single director. The House passed that proposal as part of House Financial Services Chairman Jeb Hensarling's Financial CHOICE Act, but the Senate has not considered that plan.
“Director Cordray's final act illustrates so clearly why a commission overseeing CFPB would be superior to the single director model,” said CUNA President/CEO Jim Nussle. “With a commission in place there would be no opportunity for a lame duck appointee to select a non-Senate confirmed citizen to lead an agency with such an unaccountable structure governing the entire financial services marketplace.”
Members of Congress also have weighed in on the controversy, with Democrats supporting English and Republicans supporting Mulvaney.
Trump eventually will nominate someone to serve as permanent director. However, since Trump has made it clear he opposes the CFPB, any nominee is likely to generate extended debate in the Senate.
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