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Debate Brews Over the CFPB's Interim Director
Tuesday, November 28, 2017 6:50 AM

In the wake of Consumer Financial Protection Bureau Director Richard Cordray's early departure on Nov. 24, turmoil has reigned over who actually leads the agency. Before he left, Cordray appointed Leandra English as deputy director, just hours before the Trump administration named Office of Management and Budget Director Mick Mulvaney as the temporary director. However, it is not entirely clear that Trump has the authority to appoint an interim director.

English has asked for a temporary restraining order to prevent Trump from appointing Mulvaney to the directorship of the CFPB, claiming it is unlawful. The Dodd-Frank Act, which created the CFPB, specifically says the job of director falls to the deputy director of the CFPB until a successor is nominated and confirmed by the Senate.

"In considering how to ensure an orderly succession for this independent agency, I determined that it would be best to avoid leaving this key position filled only in an acting capacity," Cordray said in an email to CFPB staff. "In consultation over the past few days, I have also come to recognize that appointing the current chief of staff to the deputy director position would minimize operational disruption and provide for a smooth transition given her operational expertise."

On the other side of the equation is the Federal Vacancies Act, which states that the current administration must choose someone who has already been confirmed by the Senate. 

At issue is the language of Dodd-Frank, which says that the bureau's deputy director will serve as acting CFPB director in the "absence or unavailability of the director," and the question of whether or not Cordray's resignation means unavailability. The decision will likely be one for the courts, which could take time and halt rulemaking at the CFPB.

The issue not only impacts the CFPB. By law, the director of the consumer bureau has a seat on the Federal Deposit Insurance Corp. board, as well as a seat on the Financial Stability Oversight Council.

Despite the dispute, Credit Union National Association has assumed Mulvaney to be the rightful leader and has sent Mulvaney a list of items it would like the CFPB to take up at once.