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District Court Again Sides with President Trump in Fight over CFPB Appointment

Steven.Lofchie@cwt.com's picture
Commentary by Steven Lofchie

A U.S. District Court judge ruled against Leandra English's request for a preliminary injunction to remove Mick Mulvaney as Acting Director of the Consumer Financial Protection Bureau ("CFPB"). In November 2017, the Judge denied Ms. English's request for a temporary restraining order that would have recognized her as Acting Director until a permanent replacement was nominated by the President and confirmed by the Senate.

As previously covered, the dispute arose after CFPB Director Richard Cordray tendered his resignation. While Mr. Cordray named Ms. English as Deputy Director and asserted her authority to serve as Acting Director, the President named Mr. Mulvaney as Acting Director. This spurred Ms. English's initial lawsuit challenging the lawfulness of President Trump's appointment. Notwithstanding Ms. English's assertion that Dodd-Frank provisions prohibit such an appointment, the District Court ruled in November that President Trump lawfully acted on authority conferred to the President under the Federal Vacancies Reform Act of 1998 ("FVRA").

In response to Ms. English's latest challenge, the District Court again sided with President Trump. Judge Timothy Kelly determined that Ms. English's complaint is "not likely to succeed on the merits of her claims, nor is she likely to suffer irreparable harm absent the injunctive relief sought." The Court concluded that the FVRA provides the President with the authority to name an Acting CFPB Director, and that the "best reading" of the statutes indicates that FVRA authority overrides the Dodd-Frank language providing that the Deputy Director shall serve as Acting Director when the Director steps down.

Ms. English can appeal Judge Kelly's decision to the U.S. Court of Appeals for the D.C. Circuit.

Commentary

The notion that the departing head of a powerful federal agency has the right to bequeath that power to a subordinate who was vetted by neither the President nor Congress seems, to pick a gentle word: daft. Mr. Cordray is not a Baron, and the CFPB is not an estate. As badly drafted as Dodd-Frank is, its supporters do not bring credit on themselves by arguing that they really intended transfers of power at the CFPB to be by primogeniture.

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