United States: CFPB Deputy Director Challenges President's Appointment Of Acting Director

Leandra English, the deputy director of the CFPB, filed a lawsuit challenging President Donald Trump's authority to name John "Mick" Mulvaney as "acting director" of the CFPB.

After announcing his resignation, outgoing CFPB Director Richard Cordray named Ms. English as Acting Director. Shortly after Mr. Cordray's announcement, President Trump named Office of Management and Budget Director Mulvaney as Acting Director of the CFPB. According to a release from the White House, Mr. Mulvaney will be Acting Director "until a permanent director is nominated and confirmed."

Ms. English is seeking a judgment and emergency temporary restraining order to prevent Mr. Mulvaney from assuming the post of CFPB Acting Director. In the suit, she asserts that President Trump's appointment of Mr. Mulvaney is "unlawful" under Dodd-Frank. Further, Ms. English claims that neither President Trump nor Mr. Mulvaney "has any ability to make or receive an appointment for the position of Acting Director of the CFPB, or to otherwise act as an officer of the CFPB."

Ms. English filed the action in the face of advice from both the U.S. Department of Justice and the CFPB's own General Counsel concluding that President Trump acted within his authority under the Federal Vacancies Reform Act of 1998 in appointing Mr. Mulvaney as the CFPB's Acting Director.

Commentary / Scott Cammarn

It is remarkable that Acting Director English has chosen to litigate in the face of memoranda from both the Department of Justice and the CFPB's own General Counsel finding that the President's actions in appointing an Acting Director was permissible.

Commentary / Steven Lofchie

Leaving aside the merits of this lawsuit, if any, the result of a victory by Ms. English would be that she would have the right to stay in office for a few more months, to fill out Mr. Cordray's appointed term. President Trump would then appoint the new Director. If a Democrat were then to be elected President, President Trump's appointee could either stay in place or gift control of the agency to another CFPB employee of that appointee's choosing. To say that this would be an odd result, and could hardly be what the Democrats want, would be an understatement. This lawsuit illustrates the need to fix the CFPB's enabling legislation. The agency head should either be appointed directly by the President or the agency should be governed by a five person bipartisan committee, as is the case with the SEC and the CFTC.

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