Round one to Trump: Federal court rejects Democrat's petition to block Mulvaney as acting CFPB chief

Yes, the judge in this case was a Trump appointee, having taken his seat on the bench in Washington just a few months ago. But the evidence is so clear-cut that Trump has the authority to appoint Mulvaney to the position that an Obama judge may well have come to the same conclusion. Read this post if you missed it over the long holiday weekend. To believe that Democrat Leandra English is the rightful acting director of the Consumer Financial Protection Bureau, you need to believe that Richard Cordray — the now ex-director of the agency — has more authority under federal law to appoint his successor than the sitting president of the United States does. It’s preposterous conceptually. And it’s so dubious legally that both the DOJ and the CFPB’s own general counsel came to the same conclusion the judge did: Yes, Mulvaney is the rightful acting director.

According to lawyer Andrew Grossman, CFPB staff quietly agreed too:

American Banker is hearing similar whispers:

In interviews, several current and former CFPB officials, most of whom did not want to speak on the record, were upset by Cordray’s eleventh-hour move during a holiday weekend, typically a time when the only news that is released is the kind people want to bury. They were also angry at his choice, arguing that English was not experienced enough for the job.

“It was shocking to people that English was selected,” said one former CFPB employee, who spoke on the condition of anonymity. “Many people were questioning Leandra’s qualifications and her experience. It’s symptomatic of the environment at the CFPB where they just handpick whomever they want and this cronyism and favoritism leads to discrimination.”

English’s qualifications or lack thereof had nothing to do with why Cordray named her deputy director before resigning. He did it purely to prompt a standoff with Trump, knowing that Trump would counter by trying to name his own acting director and expecting that that would earn him some goodwill with Democratic primary voters in Ohio, where he’s likely to run for governor. She’s a prop in a bit of partisan grandstanding by her former boss. And soon she’ll be unemployed.

The judge hasn’t issued an opinion in the matter (yet) but it’s easy to anticipate what his reasoning will be. Shannen Coffin laid out the case for Mulvaney’s rightful authority a few days ago in the Weekly Standard. In a nutshell, the Dodd-Frank Act says that the deputy director (English) serves as acting director if the director is “absent” or “unavailable.” A separate law, the Vacancies Reform Act, says the president can fill a vacancy temporarily by appointing someone who’s already been confirmed by the Senate for another federal job. Which statute is correct? Aren’t they hopelessly conflicted? Not really, notes Coffin:

First, the Vacancies Reform Act does not say that the president’s authority is overridden where a separate statute, such as Dodd-Frank, provides for other modes of designating an acting official. It merely says that the president’s power is not exclusive in those circumstances. The Department of Justice’s Office of Legal Counsel (OLC) has long taken the position that the president can designate an acting official under the Vacancies Reform Act even where, as here, another statute seemingly mandates that another official shall perform the duties of the office in an acting capacity

Curiously, in advising Trump that his actions here are legal, OLC explicitly rejected an approach to harmonizing the two statutes that would have provided even stronger support for the president’s action: It is possible to read the Dodd-Frank Act as not addressing vacancies in the office of CFPB director at all.

Unlike the OMB statute, which explicitly applies “when the office of Director is vacant,” and any number of similar federal statutes that also explicitly address vacancies in office, the Dodd-Frank Act permits the Deputy Director to act only “in the absence or unavailability of the Director.” Congress knows how to authorize an official to act in the event of a vacancy, and, for whatever reason, it did not use similar sufficiently precise language here.

There’s no conflict between the two laws. Dodd-Frank doesn’t address “vacancies,” just the temporary absence of unavailability of the director. In a case such as now where there is no director, of course the president gets to fill that vacancy. But even if you think the laws do conflict, as Coffin says, and English is the default acting director under Dodd-Frank, the president can override that default by appointing his own acting director. He’s the head of the executive branch, for fark’s sake. He could fire English if he wanted to! (Although Dodd-Frank purports to limit the president’s ability to fire the director of the CFPB except for cause, a federal appellate panel ruled that provision unconstitutional. The case is now awaiting decision by the full D.C. Circuit.)

So few are the arguments in favor of English as the rightful director instead of Mulvaney that her allies have taken to claiming that letting Trump appoint his own acting director would mean that he’d get to take over the agency without his appointee having been confirmed by the Senate. But that’s goofy twice over. Mulvaney has been confirmed by the Senate — he’s the director of OMB, installed temporarily at the CFPB with the full support of the president. English, however, hasn’t been confirmed as director of anything and has the full support only of a guy, Richard Cordray, who’s no longer in government. It’d be a nightmare of unaccountability to privilege Cordray’s right to make the appointment over Trump’s. Which is why Trump will keep winning as this case proceeds.