November 18, 2018

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Five amicus briefs in support of Leandra English filed in CFPB Acting Director dispute

Five amicus briefs were filed last Friday in support of the motion for a preliminary injunction filed by Leandra English in her action seeking a declaration that she, rather than Mick Mulvaney, has the legal right to serve as CFPB Acting Director.

Like her unsuccessful motion for a temporary restraining order (TRO), Ms. English’s preliminary injunction motion relies primarily on the argument that the provision of the Federal Vacancies Reform Act (FVRA) that authorizes the President to temporarily fill a vacancy in an executive agency position requiring confirmation is superseded by the provision in the Consumer Financial Protection Act (CFPA) that provides the CFPB Deputy Director “shall…serve as acting Director in the absence or unavailability of the Director.”

The five amicus briefs were filed by the following amici:

  • Consumer Finance Regulation Scholars.  Amici consist of a group of 10 academics described as “leading scholars of financial regulation and consumer finance.”
  • Current and former Democratic members of Congress.  Amici consist of a group of 37 current and former Representatives and Senators described  as “sponsors of Dodd-Frank [who] participated in drafting it, serve or served on committees with jurisdiction over the federal financial regulatory agencies and the banking industry, currently serve in the leadership, or served in the leadership when Dodd-Frank was passed.”  (The same amici filed substantially the same amicus brief in support of Ms. English’s TRO motion.)
  • Democratic State Attorneys General.  Amici consist of the attorneys general of 17 states and the District of Columbia.
  • Consumer advocacy groups.  Amici consist of 10 nonprofit organizations who are described as engaged in “work to defend the rights of consumers through education, advocacy, policy, research, and litigation.”
  • Peter Conti-Brown.  Professor Conti-Brown is an Assistant Professor at the Wharton School of the University of Pennsylvania who is described as “a scholar of the structure, history, and evolution of financial regulatory institutions, including especially the U.S. Federal Reserve System.” [links to the briefs]

Like Ms. English, the primary argument made by the Consumer Finance Regulation Scholars, the current and former members of Congress, and the Democratic state AGs in their amicus briefs is that the CFPA succession provision supplants the FVRA and provides the sole means for temporarily filling a vacancy in the position of CFPB Director until Senate confirmation of a new Director.  They assert that such a reading of the CFPA provision is consistent with the CFPA’s legislative history and structure and  necessary to preserving the CFPB’s status as an independent agency.  (All three of these amicus briefs argue expressly or assume that the phrase “absence or unavailability” in the CFPA provision covers a vacancy created by the CFPB Director’s resignation.  However, for the compelling reasons set forth in our blog post, we believe the phrase should not be construed to cover such a vacancy.)

The amicus brief filed by the consumer advocacy groups does not directly discuss the FVRA and CFPA provisions. Instead, the consumer advocacy groups describe regulatory, enforcement, and other actions taken by the CFPB that have “meaningfully improved consumer financial markets and concretely benefited consumers.”  They argue that the public interest weighs in favor of a preliminary injunction because, without an injunction, the CFPB “will be stymied from pursuing its [consumer protection] mission and “the public will lose the CFPB’s independence.”  According to the consumer groups, Mr. Mulvaney’s position as Director of the Office of Management and Budget, actions he has taken such as the imposition of a regulatory and hiring freeze [link to blog], and his stated support for White House priorities demonstrate that he “is inherently conflicted from supporting [the CFPB’s congressionally-mandated independence and] already, he is taking active steps to eviscerate it.”

Professor Conti-Brown also does not directly address the FVRA and CFPA provisions in his amicus brief.  Instead, he argues that even if the FVRA applies, the President’s “decision to appoint a White House official to act as the Bureau’s director eliminates the independence that Congress has required for the Bureau.”  According to Professor Conti-Brown, under the FVRA, “President Trump does not have the legal authority to appoint a White House official to lead the CFPB.”

We find no support in the FVRA for Professor Conti-Brown’s argument.  The FVRA (5 U.S.C.§ 3345) provides that when an “executive agency” position requiring confirmation becomes vacant because the person holding the position “dies, resigns, or is otherwise unable to perform the functions and duties of the office,” it may be filled temporarily by someone serving in an acting capacity in several ways.  The first way is for the “first assistant” to such a position to assume the functions and duties of the office.

However, the FVRA gives the President other options for filling the vacancy, one of which allows the President to “direct a person who serves in an office for which appointment is required to be made by the President, by and with the advice and consent of the Senate, to perform the functions and duties of the vacant office temporarily in an acting capacity subject to the [FVRA] time limitations.”  Nothing in the FVRA would disqualify someone who satisfies such criteria from serving as CFPB Acting Director because he or she is a “White House official.”  As OMB Director, Mr. Mulvaney serves in an office to which he was appointed by the President and confirmed by the Senate.  As such, he is qualified to serve as CFPB Acting Director and his appointment to that position by President Trump complies fully with the FVRA.

Copyright © by Ballard Spahr LLP

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About this Author

Barbara S. Mishkin, Ballard Spahr, Philadelphia, Deceptive Practices Lawyer, Fair Debt Collection Practices Act, Gramm Leach Bliley
Of Counsel

Barbara Mishkin focuses on consumer compliance and banking law. The federal laws with which Ms. Mishkin has dealt extensively include the Truth in Lending Act, Equal Credit Opportunity Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, and Gramm-Leach-Bliley Act. She also has significant experience with state usury and lender licensing laws, as well as state laws prohibiting unfair and deceptive acts and practices.

American Bar Association, member, Consumer Financial Services Committee;...

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