A showdown looms between the CFPB and Donald Trump over appointment power in the executive branch that has already begun to wend its way through the courts. The Department of Justice’s Office of Legal Counsel — the attorneys for the attorneys, so to speak — insist that the president has the authority to name the panel’s acting director, overriding Richard Cordray’s attempts to pick his own successor. In response, the CFPB’s top attorney … agrees. Reuters reports that the board’s general counsel will tell the agency, “nice try”:
The top lawyer for the U.S. Consumer Financial Protection Bureau (CFPB) has concluded that President Donald Trump has the authority to name its acting director, three sources familiar with the matter said on Sunday, rejecting an effort by her former boss at the agency to name his immediate successor.
The office of CFPB General Counsel Mary McLeod has prepared a memo concurring with the opinion of the U.S. Justice Department that Trump has the power to appoint his budget chief, Mick Mulvaney, as temporary leader of the federal watchdog agency, according to the sources, who spoke on condition of anonymity.
If you’ve just come across this story, be sure to read Allahpundit’s legal review of the situation. The law that established the CFPB contains a clause that allows the deputy director of the agency to assume the role of director in his/her “absence or unavailability,” which outgoing director Richard Cordray and his allies interpret to mean any opening in the director position. However, the Federal Vacancies Reform Act (FVRA) allows the president to appoint someone who has already received Senate confirmation for another post to act as an interim replacement.
The CFPB and Cordray’s allies argued that the CFPB law overrides in this case, but that’s not likely for a couple of reasons. First, the CFPB statute doesn’t clearly reference an opening in the case of resignation or termination, so it’s questionable whether a court would rule that it applies here in the first place. “Absence or unavailability” sounds more like a temporary operational absence, not a permanent separation; if Congress contemplated a resignation as a scenario for this kind of action, they could have included that as an explicit condition. Second, that interpretation would allow unelected bureaucrats to perpetually choose their own successors if the Senate delayed or stalled confirmation of a replacement — as Democrats will certainly attempt to do with a Trump pick for the CFPB, regardless of who it is.
This scenario creates a big political risk for anyone making this argument too. Democrats who insist that rulemaking agencies don’t answer to presidential authority will play right into Trump’s hands when he argues about unaccountable bureaucracies. A fight over Cordray is almost certainly legally doomed, as even the CFPB’s attorney has concluded, but it’s a big political loser outside of “resistance” circles as well.
Nevertheless, it appears that the fight to make the federal bureaucracy unaccountable will continue, at least in court:
In a lawsuit filed in the U.S. District Court of D.C., Leandra English called herself the “rightful acting director” of the CFPB and asked for a temporary restraining order to prevent Trump from appointing White House budget director Mick Mulvaney to the job.
“The President’s purported or intended appointment of defendant Mulvaney as Acting Director of the CFPB is unlawful,” the lawsuit says. …
Supporters of English’s claim to the acting director position point to language in the 2010 legislation, known as Dodd Frank, that created the bureau. The legislation said the CFPB’s deputy director would take over in the absence of its director, they note. Cordray noted that statute when resigning and designating English as acting director.
“Instructions under the Dodd-Frank and Wall Street Reform and Consumer Protection Act are plain and simple — if the CFPB Director steps down, the Deputy Director assumes the role of Acting Director until the President nominates, and the Senate confirms, a permanent Director,” said Mike Calhoun, president of the Center for Responsible Lending.
Well, no, those instructions aren’t “plain and simple,” and do not contain any reference to a director who “steps down.” And in any case, the authority within the FVRA allows Trump to appoint Mulvaney as interim director, at which point the position is no longer “absent or unavailable.” The White House says that both Mulvaney and English will come to work today and that English will report to Mulvaney whether she hires a lawyer or not.
The courts will eventually rule the same way. Just ask the CFPB’s own attorney. They’ll just waste a lot of money and time, and Democrats will manage to make themselves even less connected to anyone outside of the coastal elites who think unaccountable bureaucracies are the preferred way to govern.
In Hooks, the plaintiff asserted that because the National Labor Relations Act (the “NLRA”) provided a means for temporarily filling vacancies in its top positions, in light of the Exclusivity Provision of the FVRA, the “NLRA provides the exclusive means for the President to appoint an Acting General Counsel.” 816 F.3d at 555.
The court rejected this argument, holding that when the Exclusivity Provision of the FVRA and another statute both provide means for filling a vacancy, the President may elect between the statutes to designate an acting agency head. The court reasoned that because both the NLRA and the FVRA provide means for filling a vacancy, “neither the FVRA nor the NLRA is the exclusive means of appointing an Acting General Counsel of the NLRB. Thus, the President is permitted to elect between these two statutory alternatives to designate an Acting General Counsel. ” Id. at 556 (first emphasis in original; second emphasis added). …
As a panel of the D. C. Circuit noted: “[T]he Director enjoys significantly more unilateral power than any single member of any other independent agency…. Indeed, other than the President, the Director of the CFPB is the single most powerful official in the entire United States Government, at least when measured in terms of unilateral power.” PHH Corp. v. Consumer Fin. Prot. Bureau, 839 F.3d 1, 16 (D.C. Cir. 2016) (emphasis in original).
The panel went on to say: “The CFPB is exceptional in our constitutional structure and unprecedented in our constitutional history.” Id. at 21. The panel then ruled that the Dodd-Franks Act is unconstitutional insofar as it prevents the President from removing a Director without “cause.”
While that issue is now before the full D. C. Circuit, the panel’s rationale was sound as applied to the Director, and it applies with even greater force to an Acting Deputy Director, who was simply hired by Cordray.
Troutman Sanders’ attorneys also note that the “absence or unavailability” clause in Dodd-Frank will almost certainly be interpreted as referring only to temporary absences, as noted above.