The Washington PostDemocracy Dies in Darkness

Sorry, Mr. President. You can’t make Mulvaney ‘acting’ head of the Consumer Financial Protection Bureau.

The law says that the agency’s deputy director takes over when the director resigns. Nothing administration lawyers have said changes that.

The White House and the Consumer Financial Protection Bureau are at odds over who should lead the watchdog agency, and what its role should be. (Video: Jenny Starrs/The Washington Post, Photo: Jacquelyn Martin/The Washington Post)

Now that Richard Cordray, the first director of the Consumer Financial Protection Bureau, has stepped down, President Trump wants his current budget director, former Republican congressman Mick Mulvaney, to head the CFPB in his spare time. It’s no wonder that he’d entrust the agency created to protect average Americans from unfair lending practices to a loyalist who flatly opposes the agency’s mission. But apart from his tendency to undercut nearly anything achieved during his predecessor’s tenure, and his ongoing demonstration that he cares not much about protecting the little guy — the “forgotten men and women” he waxed about with faux earnestness in his inaugural address — the president is going about it in a way that’s plainly illegal.

It’s bad enough Trump wants the CFPB to be led by a man who once called the agency a “joke.” He’s willing to run roughshod over Congress to do it.

Under the explicit text of the 2010 Dodd-Frank financial reform act, which created the CFPB, Deputy Director Leandra English became CFPB’s “acting director” at midnight on Nov. 24, when Director Richard Cordray resigned his post and thereby became “unavailable” within the meaning of the law’s specific provision for that contingency that the deputy director will “serve as acting director in the absence or unavailability of the director.” Even the Justice Department’s Office of Legal Counsel acknowledged, in its Nov. 25 memo to White House Counsel Donald McGahn, that this language applies, conceding that “the resignation of the director would satisfy the requirement of ‘absence or unavailability.’ Therefore, the statute would permit a properly appointed deputy director to serve as the acting director during a vacancy.”

Yet OLC concluded, unconvincingly, that the 1998 Federal Vacancies Reform Act still leaves the president with the option of installing Mulvaney, even though that statute’s own terms explicitly state that it doesn’t kick in when another agency-specific statute (here, the subsequently enacted provision of Dodd-Frank) “designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity.” The OLC analysis treated that language as inconclusive because the “Vacancy Reform Act itself, like the CFPB-specific statute, similarly uses mandatory terms,” as if interpreting overlapping statutes were a matter of grammatical classification rather than a matter of making sense of an overall statutory scheme.

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However muddled, at least it’s a theory. But CFPB’s general counsel, Mary McLeod, in her own Nov. 25 memo, offers a wholly incongruous legal gloss. She doesn’t rebut OLC’s concession that the vacancy created by Cordray’s resignation triggers the agency-specific succession provision of Dodd-Frank — but she doesn’t exactly accept it, either. Instead, she toys with various definitions of “unavailability” as she attempts to advance the idea that the director’s resignation makes his status something other than “unavailable” (an alternative status she never quite articulates), winding her way to the notion that Congress may have intended “unavailability” to mean something temporary, not permanent.

As P.G. Wodehouse would have put it, “If not actually disgruntled” by OLC’s position, McLeod is “far from being gruntled” by it. Worse, though, is her assessment of the legal precedent.

She quotes an OLC opinion issued a decade ago dealing with the entirely different situation posed by the president’s power “to name as acting attorney general an individual who would not have become acting under the Attorney General Order implementing the agency succession statute.” She also quotes from a 9th Circuit decision that says that “neither the FVRA nor the NLRA is the exclusive means of appointing an acting general counsel of the NLRB” — an observation that is irrelevant because the National Labor Relations Board is structured in an altogether different way from the CFPB — before getting to her real point: that she needn’t “resolve the meaning” of the statutory language because a provision in an earlier version of the bill that was never signed into law somehow supports the administration’s view. In fact, the legislative history does the exact opposite. McLeod recognizes, as she must, that the House-passed version of the law creating the CFPB would have made the FVRA available to the president in circumstances like this — but — that Congress deliberately replaced that version with one not giving the president a power to circumvent Dodd-Frank. Then, having produced the very evidence that negates her own argument, she says the statute’s history is “unpersuasive.”

McLeod’s argument comes across like something cooked up to support a preordained result — namely, that there must be some rationale for installing Mulvaney at CFPB for the time being without going through a Senate confirmation hearing for him, or for anyone else.

This is a shameful way to hamstring an agency vital to the protection of consumers from financial malfeasance. Deputy — actually, Acting — Director English has sought a temporary restraining order to prevent Mulvaney from taking over the CFPB before this issue can be adjudicated. If Trump manages to put Mulvaney in the director’s chair before a court can rule, it’ll mean that the president has usurped the prerogatives of Congress on the way to installing his own loyalist to kneecap an agency created to protect main street from the excesses of giant banks and credit card companies. It would be an executive-branch power grab; one that gives foul new meaning to the notion of what it means to “occupy” Wall Street.