Pete Schroeder
@peteschroeder
BREAKING: Leandra English has filed suit, seeking a temporary restraining order to prevent Mick Mulvaney from taking control of the CFPB.
Laurence Tribe
@tribelaw
I’ve now read the 3-pg internal memo dated 11/25/17 by Mary McLeod supporting @POTUS’s power to override the specific Dodd-Frank provision making Leandra English Acting Director of CFPB. The memo must’ve been written in great haste. It’s weakly reasoned and wholly unconvincing.
Renato Mariotti
@renato_mariotti
THREAD: What’s the CFPB, what’s going on there, and why should I care? (Hint: There is a struggle for leadership of an important agency.)
1/ The Consumer Financial Protection Bureau was created by the Dodd-Frank Act of 2010, which was passed after the financial crisis as a way of reining in problems in our financial system
2/ The CFPB is the only federal agency focused on protecting consumers of financial services. Before it was created, various federal agencies (and state Attorneys General) filled that void.
3/ The CFPB has been responsible for tougher regulation of the financial services industry. It also brings lawsuits against predatory lenders and others who violate financial laws.
4/ Typically, federal agencies are controlled exclusively by the executive branch and are not independent, although certain high level positions require Senate approval.
5/ For example, Trump controls the Department of Energy. If Rick Perry does something Trump doesn’t like, he can fire Perry and temporarily appoint a replacement. That ensures that the President controls all the agencies in the executive branch of government.
6/ Rarely, Congress makes agencies that are supposed to be more independent. The most famous example is the Federal Reserve, which has a lot of control over our currency.
7/ The Fed is set up to be more independent by having its leaders serve terms that are longer than a Presidential term and by ensuring that its funding does not come from Congress.
8/ The CFPB is also set up to be more independent than a typical agency. Its director has a five-year term (longer than a President) and can only be removed from office for good cause.
9/ The Dodd-Frank Act also establishes that the Director appoints the Deputy Director, who becomes Acting Director “in the absence or unavailability of the Director.”
10/ Two days ago, the first director of the CFPB resigned. Before he resigned, he appointed a Deputy Director named Leandra English. Reading the language I quoted above, it seems fairly obvious that she’s Acting Director, right?
11/ There’s a complication. Trump appointed a man named Mick Mulvaney to be Acting Director. How? There is a more general law passed before the Dodd-Frank Act that lets the President temporarily fill vacancies before Congress approves a new person.
12/ The Trump Administration will argue that resignation is not “absence or unavailability.” That this language is only for a temporary absence, not a resignation.
13/ But the law cited by the Trump Administration carves out situations, like this one, where another law (like Dodd-Frank) provides for an Acting Director.
14/ I think English has the better argument, although there are arguments on both sides. Ultimately it will be decided by a court, because English filed a lawsuit challenging Mulvaney’s appointment: assets.documentcloud.org/documents/4310647/English-Complaint-CFPB.pdf
15/ The stakes are huge, because Mulvaney has called the CFPB a “sad, sick joke” and said he doesn’t like the fact that the CFPB exists. This court case will decide whether the extent to which we can rely on the CFPB to protect consumers going forward
16/ If Mulvaney stays in power, even more will be moved onto the plate of state Attorneys General. Mulvaney’s appointment, and this court battle, are another reminder of how much elections matter. /end
ADDENDUM: One point a few of you raised is that the Trump Justice Department has made a slightly different argument, which is basically that both replacement provisions work at the same time. I think it’s a much weaker argument but a court agreed with it in a different context.