Washington Report

Advocacy Updates from Washington D.C.

Fight for CFPB Leadership Continues

Before Consumer Financial Protection Bureau (CFPB) Director Richard Cordray resigned, he appointed CFPB Chief of Staff, Leandra English, to the position of acting Director. At the same time, the President appointed the Office of Management and Budget (OMB) Director, Mick Mulvaney, to serve as acting Director, which English challenged by seeking a temporary restraining order (TRO) against the President appointing and Mulvaney serving as the acting Director. The court denied the TRO on November 28, and on December 6, English filed a motion for a preliminary injunction in the U.S. District Court for the District of Columbia.

In her motion, English again argues the Dodd-Frank Act, which states the Deputy Director “shall…serve as the acting Director in the absence or unavailability of the Director,” controls with Director resignations. The District Court previously rejected this claim in denying the TRO, holding the President’s power under the Federal Vacancies Reform Act of 1998 (FVRA) allows for the appointment. English also argues that Mulvaney serving as acting CFPB Director is inconsistent with the statutorily declared independence of the agency, as the President can dismiss the OMB Director at-will, rather than for-cause. The court is expected to consider this case on an expedited timeframe, with a hearing scheduled on the recent motion for December 22. The court's ruling on the preliminary injunction is appealable to the U.S. Court of Appeals for the D.C. Circuit.  

A second lawsuit, filed by the Lower East Side People’s Federal Credit Union in the U.S. District Court in the Southern District of Manhattan, also seeks declaration that Mulvaney’s appointment is unconstitutional, allowing English to serve as acting Director. Arguing similar issues to English, the credit union claims the FVRA is superseded by the Dodd-Frank provision and the Mulvaney appointment threatens the independency of the agency.    

In the interim, Mulvaney continues to serve as acting Director, reviewing pending enforcement actions and placing a hold on new enforcement actions, in addition to implementing a hiring and regulatory freeze for 30 days. He has also directed agency staff to disregard any requests made by English asserting her role as acting Director. Also, a former staffer of the House Financial Services Committee, Chaired by Jeb Hensarling (R-TX), has joined the CFPB as a Senior Advisor.

Since his resignation, Cordray has formally announced his intention to run for Governor of Ohio. Cordray previously served as Ohio attorney general and state treasurer.
 

For more on the ongoing challenge to the CFPB’s independence in PHH Corp. v. CFPB, see here. For more on English’s claims, see the supporting memorandum and the First Amended Complaint

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