The normally routine question of who takes over as acting head of a federal agency when the leadership position becomes vacant has turned into a major political and legal contest in the case of the Consumer Financial Protection Bureau (CFPB). The Dodd-Frank Act, which created the CFPB, establishes the position of CFPB Director as a Presidential appointee subject to Senate confirmation. The Act further provides for a CFPB Deputy Director “who shall (A) be appointed by the Director; and (B) serve as acting Director in the absence or unavailability of the Director.” On November 24, the last day of his tenure, former CFPB Director Richard Cordray appointed his chief of staff, Leandra English, Deputy Director in order for her to become Acting Director upon his departure pursuant to the quoted Dodd-Frank provision. (Ms. English, who had occupied political positions in the Obama Administration, converted to her career position at CFPB shortly before President Trump took office.)
However, on the evening of November 24, President Trump announced that he was appointing Mick Mulvaney, currently Director of the Office of Management and Budget, as Acting Director of the CFPB pursuant to the Federal Vacancies Reform Act. The Vacancies Reform Act is a statute of broader applicability dealing with the assignment of acting officials to vacancies in executive branch positions, such as CFPB Director, that require Presidential appointment and Senate confirmation (known as “PAS” positions). Among other things, this statute authorizes the President to temporarily fill a vacant PAS position with someone already serving in another PAS position, such as Mulvaney.
At the time Cordray appointed English as Deputy Director he stated that he was positioning her to become Acting Director in order to “ensure an orderly succession for this independent agency,” to “minimize operational disruption,” and to “provide for a smooth transition.” The irony of this statement became apparent on Monday morning, November 27, when both Mulvaney and English reported to CFPB, each claiming to be the rightful Acting Director. English promptly sued Trump and Mulvaney seeking to oust Mulvaney and have herself declared the legitimate Acting Director. (She actually filed her lawsuit on Sunday, November 26.)
The judge assigned to the case denied English’s request for emergency relief but the lawsuit could drag on for some time if English persists. As long as it continues, one can expect great uncertainty to prevail both within CFPB and among those affected by its actions. The dispute also smacks of a well-orchestrated political circus. Mulvaney seems to have seized control at least as de facto Acting Director. However, the doughnuts he supplied for the staff are unlikely to alleviate their stress since his general contempt for the Bureau is well known. Meanwhile, several Democratic Senators posed for grandstanding photos with English and staged protests outside the Bureau’s offices. This sorry episode provides further evidence, if any is needed, of the hyper-partisanship, with its attendant chaos and dysfunction, that seems to define the federal government today.
The legal arguments focus primarily on the interplay between the Dodd-Frank Act and the Vacancies Reform Act: Is Dodd-Frank’s specific provision for the CFPB Deputy Director to become Acting Director the exclusive means of temporarily filling a vacancy in the Director position or does the more general Vacancies Reform Act authority remain available as another option, thereby enabling the President to make his own choice? The competing legal arguments, which debate at length the meaning of the language as well as the legislative and drafting histories of the two statutes, need not be rehashed here. For those interested, the following links lay out the respective statutory arguments in favor of Mulvaney and English.
The Mulvaney supporters appear to have the stronger case based on the statutory interpretation arguments alone. Even the CFPB’s general counsel concluded that Mulvaney is the rightful Acting Director. In any event, I’d submit that two broader considerations remove any doubt and thoroughly undercut the case for English.
First, accepting the argument that the Dodd-Frank provision is the exclusive vehicle for obtaining an Acting CFPB Director leads to an untenable result. By the logic of this argument, there could be no Acting Director at all if a Deputy Director was not in place when a vacancy arose. Under this entirely plausible scenario (English was not named Deputy Director until the day Cordray left), the CFPB’s work would grind to a halt until a new Director was formally nominated by the President and confirmed by the Senate. Congress could not have intended such a result.[1]
Second, this argument not only leads to a potentially absurd result but also one that is patently unconstitutional. Making appointments to executive agencies is a fundamental presidential function under the Constitution. The President’s appointment power is not absolute. In order to protect the Senate’s own constitutional prerogative of advice and consent, Congress may place some restrictions on the President’s ability to leave acting officials in vacant PAS positions. The time limits imposed by the Vacancies Reform Act reflect this. However, Congress surely cannot flatly preclude the President from making any temporary appointment to fill a vacancy in an executive agency PAS position. Yet this is the effect of the position advanced by English supporters and, indeed, their purpose as well. It’s abundantly clear that their primary goal is to prevent President Trump from assuming control over the CFPB through his own appointee(s) for as long as they possibly can. Thus, if Dodd-Frank was construed to preempt the President’s authority to appoint an acting head of CFPB, it would be unconstitutional.
Finally, I wonder whether English even has the requisite standing to maintain her suit. It’s at least questionable whether she can assert a legally enforceable right to the Acting Director position or that she suffers a legally cognizable injury if denied that position.
Eventually President Trump will succeed in putting a new CFPB Director in place. One can only hope that in the meantime English and her supporters will abandon their obstructionist efforts and allow the Bureau to go on with its business. Prolonging this dispute simply forestalls the inevitable, accomplishes nothing constructive, and feeds into the claims of its many critics that CFPB is an unconstitutional and out of control rogue agency.
[1] Perhaps English’s supporters would concede that the President could still exercise his constitutional authority to make a recess appointment somewhat sooner if the opportunity arose. However, this is hardly a satisfactory alternative.