A U.S. District Court Judge rejected the request for an injunction sought by CFPB Deputy Director Leandra English and an amicus brief filed by twenty-five current and former Democratic members of Congress. As previously covered, the lawsuit was filed over a dispute as to whether Ms. English, who was named as Acting Director by outgoing Director Richard Cordray, or President Trump's pick, Mick Mulvaney, is the rightful Acting Director.
The Congress members claimed that Ms. English, who was named Deputy Director before Mr. Cordray's resignation, is the lawful Acting Director. While not disputing the President's right to choose the next CFPB Director, the members argued that Dodd-Frank legislative history provides for the Deputy Director to serve as Acting Director until a replacement is chosen by the President and confirmed by the Senate. They argued further that the provisions in Dodd-Frank providing for a successor at the CFPB supersede the Federal Vacancies Reform Act provisions (contra to the memorandum from the DOJ Office of Legal Counsel); thus, the President does not have the right to replace Ms. English with Mr. Mulvaney.
Commentary / Steven Lofchie
The notion that the departed head of the CFPB can simply bequeath control of one of the most powerful agencies in the federal government to a former subordinate seems, on its face, far-fetched. Democrats may very well have objections to the new Acting Head of the CFPB, but query whether those objections justify tearing at any reasonable process of good government to allow departed government officials to bestow their power by will on the next generation. If a court were to find that the passing of regulatory agencies in retired employees' estates is sanctioned by Dodd-Frank, then that would be an absolutely compelling argument to rewrite the CFPB's enabling legislation.
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