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CFPB Dispute: Statute, Precedent, and the Constitution Are on Trump's Side

November 27, 2017

The following is the statement of Committee for Justice President Curt Levey on the challenge to President Trump's appointment of Mick Mulvaney as Acting Director of the Consumer Financial Protection Bureau (CFPB):

 

Richard Cordray's attempt to bypass the President's appointment power and make his crony the Acting Director of the CFPB cannot be legally defended. It is just another chapter in the political resistance to the Trump Administration being waged by progressives inside and outside the federal government, who seem to think that their righteous indignation trumps the rule of law.

 

In this case, progressives are indignant that the regulation-loving CFPB Director Richard Cordray, who resigned Friday to run for governor of Ohio, has been temporarily replaced by OMB director Mick Mulvaney, a critic of federal overregulation. Instead, they should be thankful that President Trump allowed Cordray to serve for as long as he wanted, rather than removing him for cause, as many of the preisdent's supporters had urged.

 

President Trump's opponents are trying to use a provision in the CFPB statute, stating that the Deputy Director shall serve as Acting Director in the absence of the Director, to override the Vacancies Reform Act, which affirms the President's constitutional power to name replacements for executive branch officials. After allowing the deputy position to remain unfilled for more than two years, Cordray appointed his chief of staff, Leandra English, as deputy on his last day in office.

 

However, even the CFPB general counsel Mary McLeod, hired under Cordray, isn't buying this attempt to bypass the President. She advised "all Bureau personnel to act consistently with the understanding that Director Mulvaney is the Acting Director of the CFPB" after concluding that the relevant statutes, their legislative history, and Department of Justice precedent all make it clear "that the President may use the Vacancies Reform Act to designate an acting official, even when there is a succession statute under which another official may serve as acting." Moreover, the Obama administration took this same position, as did the liberal U.S. Court of Appeals for the Ninth Circuit.

 

Sen. Elizabeth Warren and the other designers of the CFPB tried to insulate their regulatory behemoth from Congressional oversight and the rest of the constitutional system of checks and balances. The courts have pushed back, but progressives' current attempt to do an end run around the Vacancies Act indicates that they still view the CFPB as essentially its own branch of government, separate from the executive branch as well as Congress.

 

Because that view is counter to the Constitution, President Trump will prevail in the dispute over Mulvaney's appointment. And when he does, it will be an important reminder that the CFPB is not above the law.

 

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