A fight for control of consumer watchdog agency

  • 28 November 2017
  • NormanL
A fight for control of consumer watchdog agency

The week after Thanksgiving brought with it one of the more bizarre tales to ooze out of the DC swamp -- a political and legal fight for control of a powerful federal agency most people have never heard of:

 An Obama-era official at the Consumer Financial Protection Bureau sued the Trump administration on Sunday night to block budget director Mick Mulvaney from taking control of the agency.

Leandra English, a career staffer appointed Friday to lead the CFPB by former director Richard Cordray, filed the lawsuit in federal court the night before the bureau was set to reopen with dueling temporary leaders vying to take it over. In doing so, she touched off a legal fight that will trigger court interpretations on how different statutes regarding succession apply to the unusual struggle over control of a federal agency.

President Donald Trump asserts he has the power to appoint an acting director, while the departing chief believed the law said otherwise.

Last-minute maneuvering by Mr. Cordray means that come Monday morning, two officials have a claim on the acting top job: Mr. Mulvaney, who also serves as head of the Office of Management and Budget, and Ms. English.

The lawsuit, filed at the U.S. District Court for the District of Columbia, escalates the confrontation between the White House and the Obama-era leadership of the CFPB, an independent agency created after the financial crisis.

Ms. English, a former chief of staff, was appointed by Mr. Cordray as deputy director so she could assume the role of acting director of the agency under a provision in the Dodd-Frank financial law, which created the CFPB.

Calling herself the “rightful acting director” of the bureau, Ms. English is seeking a judgment and a temporary restraining order to prevent Mr. Mulvaney from becoming interim CFPB chief.

“Ms. English has a clear legal entitlement to the position of acting director of the CFPB,” the lawsuit said. “The president’s purported or intended appointment of defendant Mulvaney as acting director of the CFPB is unlawful.”

Mr. Trump’s appointment of Mr. Mulvaney, a harsh critic of the CFPB, is based on the Federal Vacancies Reform Act, which sets rules for vacant government agency positions and gives the president authority to appoint an acting director.

As we noted earlier, the Trump administration had a golden opportunity to remake the (likely unconstitutional) CFPB with Cordray's departure, bringing not just balance to the agency, but a strong measure of accountability as well.

Cordray sought to prevent that on his way out the door. To its credit, however, the Administration has refused to surrender its clear legal authority to make agency appointments. That it has always had such authority should be self-evident. But it appears the courts will have to reiterate what the law already makes clear, wasting time and resources along the way.

We suspect this episode will give energy and direction to reformers who have long complained about the CFPB's structure and mission. Until then, we must contend with a farce that could only happen in a town and inside a political culture that still cannot understand why so many people hold in in such contempt. 

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