- President Donald Trump and outgoing CFPB director Richard Cordray both named his successor.
- The opposing sides are now dueling over who has the legal right to do so.
- The dust-up could lead to two people starting work on Monday believing that they are running the agency.
President Donald Trump and Richard Cordray, the recently departed head of the Consumer Financial Protection Bureau, both named separate successors at the agency following Cordray’s abrupt Friday exit, creating a fresh battle in Washington that could have significant ramifications for the agency that sprang up out of the financial crisis.
Both sides have claimed legal authority over the other to name the successor to an agency that was championed by the likes of Democratic Sen. Elizabeth Warren of Massachusetts. It has also been vilified by much of the right, including by Office of Budget and Management Director Mick Mulvaney, the person named acting director of the CFPB by Trump on Friday night.
Cordray, who is expected by many to make a bid for Ohio’s Democratic gubernatorial nomination, announced an earlier-than-expected departure from the agency Friday. He named his chief of staff, Leandra English, as the acting director of the CFPB. Cordray, nominated by President Barack Obama to lead the agency, announced that he would leave the position earlier this month.
That means on Monday, in all likelihood and unless some sort of agreement can be reached in the interim, two people will begin the work day believing they are running the agency.
Trump weighed in Saturday afternoon on Twitter, calling the agency a “disaster.”
“The Consumer Financial Protection Bureau, or CFPB, has been a total disaster as run by the previous Administrations pick,” he said. “Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!”
Two sides start to take shape
After announcing Mulvaney, who once called the agency a “sick, sad joke,” as acting director, the White House argued that the Federal Vacancies Act of 1998 allows for Trump to override Cordray’s selection. Those in opposition cited the 2010 Dodd-Frank Act, which established the agency, as evidence that Cordray, and not Trump, has the proper authority to name a replacement until a Trump-chosen successor is confirmed by the Senate.
Dodd-Frank calls for the agency’s deputy director to serve as acting director when the director is absent or unavailable. Meanwhile, the Federal Vacancies Act allows for Trump to appoint any Senate-confirmed official, such as Mulvaney, as acting director of such an agency. Mulvaney will remain OMB director while serving as the CFPB’s acting director.
The White House, which said in a statement that Trump looks forward to Mulvaney taking “a common sense approach to leading the CFPB’s dedicated staff” that “will empower consumers to make their own financial decisions and facilitate investment in our communities,” made its argument in a conference call with reporters Saturday morning.
Administration officials, who spoke on background, called the move “typical” and “routine” with years of precedent to back it up. They said the Federal Vacancies Act allows for Trump to supersede Dodd-Frank.
“The common objections that you hear in these various blog posts online is that, ‘Oh, the CFPB statue said the CFPB deputy director shall serve as the director,” one White House official said, according to The Hill. “That’s clear in lots of these statues that the Vacancies Act trumps.”
The official added that the White House doesn’t expect this clash to turn into a legal dispute.
“I know it makes it a better story if things are unpleasant and there’s a clash of two directors, but I don’t think it’s [at] all clear that’s going to happen,” they said. “I think there’s a very good chance that Director Mulvaney will come in on Monday morning and that will be end of things.”
But the official said Cordray’s move to appoint a successor indicates “that he is trying to provoke” such a legal battle.
Most prominently arguing in favour of Cordray’s right to appoint his interim successor was Warren, who tweeted Friday that Trump “can nominate the next @CFPB Director – but until that nominee is confirmed by the Senate, Leandra English is the Acting Director under the Dodd-Frank Act.”
— Elizabeth Warren (@SenWarren) November 25, 2017
Others agreed that the Trump administration has the proper authority to name the interim successor, regardless of Dodd-Frank’s language.
Trump “is right,” tweeted conservative radio host Hugh Hewitt. “Director Mulvaney is running @CFPB. If anyone tells him to pound sand, they will be pounding the pavement ala PATCO. We are not a government of unelected bureaucrats.”