Vacancies Act Doesn’t Apply in CFPB Case, Dodd-Frank Authors Say

By Chris Bruce

The Dodd-Frank Act was crafted to avoid the kind of leadership tug-of-war that’s now playing out over the Consumer Financial Protection Bureau, the two principal architects of the 2010 statute said Nov. 30.

Former Senate Banking Committee Chairman Chris Dodd (D-Conn.) and former House Financial Services Committee Chairman Barney Frank (D-Mass.) said succession provisions in Dodd-Frank should control an ongoing dispute over who is the rightful interim leader of the CFPB ( English v. Trump , D.D.C., 17-cv-02534, briefing deadline proposed 11/29/17 ).

“We were thinking about exactly the situation we find ourselves in today,” Dodd said in a call with reporters.

Leandra English, the CFPB’s former chief of staff, was tapped as deputy director in a last-minute Nov. 24 appointment by departing CFPB Director Richard Cordray.

English says a plan of succession under Dodd-Frank means that she’s now the rightful acting director, but the Trump administration disagrees, saying the Federal Vacancies Reform Act allows the president to appoint budget director Mick Mulvaney.

Although English Nov. 28 lost a bid to temporarily block Mulvaney from taking the post, Dodd and Frank said she should prevail on the merits of the case. Dodd, joined by Frank and Rep. Maxine Waters (D-Calif.), ranking member of the House financial services panel, said Dodd-Frank’s succession provisions were deliberately crafted as part of a broader effort to ensure that the CFPB could operate as an independent consumer protection agency even with a change at the top.

Dodd called the situation at issue in the case the “exact fact situation that provoked us to write the statute as we did.”

The two former lawmakers were joined by two law profesosors who also said Dodd-Frank should control the case, and Brianna Gorod, a lawyer at the Constitutional Accountability Center in Washington who prepared a friend of the court brief in support of English on behalf of current and former members of Congress.

Gorod said the focus of the case could soon change. Judge Timothy J. Kelly of the U.S. District Court for the District of Columbia Nov. 28 denied English’s motion for an emergency temporary restraining order.

The case is now likely to go forward either on a motion by English for a preliminary injunction, or by focusing on the merits of the legal questions themselves, or some combination of the two. Kelly has given both sides until Dec. 1 to submit a briefing schedule, depending on how English chooses to go forward.

The main point, according to Gorod, is that Kelly hasn’t yet issued a ruling on the merits. That’s still ahead, she said on the call. “The legal fight here is far from over,” Gorod told reporters. Once the court considers the case on that basis, she said, “it will and should conclude that Leandra English is the current acting director of the Bureau.”

Also on the call were Michael Barr, dean of the University of Michigan’s Gerald R. Ford School of Public Policy and a former Treasury Department official who helped draft Dodd-Frank, and Peter H. Schuck of Yale Law School. They also said the Dodd-Frank succession provisions were meant to govern in such cases.

To contact the reporter on this story: Chris Bruce in Washington at cbruce@bloomberglaw.com

To contact the editor responsible for this story: Michael Ferullo at mferullo@bloomberglaw.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.