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Will the Real CFPB Acting Director Please Stand Up?

28 November 2017

U.S. Rep. Maxine Waters of California, the top Democrat on the Financial Services Committee, issued a statement Saturday calling Mulvaney "unacceptable" to lead the CFPB because of his "noxious" views toward its mission to protect consumers. Cordray's departure triggered a provision of the 2010 Dodd-Frank law that stipulates the deputy director-in this case, English-"shall" become the acting director of the agency should the CFPB head leave, until the president nominates, and the Senate confirms, a permanent replacement.

The White House insisted Mulvaney is firmly in control of the agency, despite a court challenge from Leandra English, who was elevated to interim director of the bureau last week by its outgoing director Richard Cordray, an Obama appointee.

"A new director can not gut the agency, a new director can not put CFPB out of business because the CFPB is a creature of statute and it has very specific responsibilities and authorities", she said.

"Now that the CFPB's own general counsel-who was hired under Richard Cordray-has notified the bureau's leadership that she agrees with the Administration's and DOJ's reading of the law, there should be no question that Director Mulvaney is the acting director".

Why was there a vacancy at the Consumer Financial Protection Bureau?

On Monday, the Consumer Financial Protection Bureau (CFPB) found itself in the middle of a freaky back and forth between Acting Director Leandra English - handpicked by outgoing chief Richard Cordray - and President Trump's chosen CFPB successor, Mick Mulvaney, who arrived at the agency carrying what appeared to be boxes of Dunkin' Donuts, presumably for his new "staffers".

The White House cites the Federal Vacancies Reform Act of 1998.

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First, it is hard to see how Deputy Director English obtains an injunction, as a court could reasonably have doubts about both her likelihood of success on the merits, and her claim of irreparable harm (since she may not have a cognizable legal interest in running the agency). McLeod advised all CFPB staff "to act consistently with the understanding that Director Mulvaney is the acting director of the CFPB". CFPB also has broad regulatory authority over financial institutions with assets over $10 billion.

"To ensure the Bureau's independence, Congress specified that the Director would not serve at the pleasure of the President and could instead be removed only for cause", the lawsuit adds. "We will bring it back to life!" But CFPB's general counsel, Mary McLeod, in her own November 25 memo, offers a wholly incongruous legal gloss.

"Even when the Vacancies Reform Act is not the "exclusive" means for filling a vacancy, the statute remains an available option, and the president may rely upon it in designating an acting official in a manner that differs from the order of succession otherwise provided by an office-specific statute", he wrote in a memo.

"The Consumer Financial Protection Bureau, or CFPB, has been a total disaster as run by the previous Administrations pick".

"Whether that is a good thing or not is a different calculation", she said.

Hold up. What is the Consumer Financial Protection Bureau?

"We will probably see much more lax enforcement against banks charging deceptive fees, debt collectors abusing people, student lenders not applying people's payments correctly", said Lauren Saunders, associate director of the National Consumer Law Center.

Will the Real CFPB Acting Director Please Stand Up?