While most lawyers have declared the leadership battle at the Consumer Financial Protection Bureau all but over, former lawmakers Barney Frank and Chris Dodd teamed up again Thursday to make a last-minute protest to the Trump administration’s recent installation of an acting director at the agency.
The former heads of the House and Senate banking committees argued that the Dodd-Frank Act clearly intended to allow the CFPB’s deputy director to serve as acting director after the full-time head of the agency departed.
They said a federal judge erred when he ruled this week that the 2010 financial reform law did not take precedence over the Federal Vacancies Reform Act, which broadly allows a president to appoint any Senate-confirmed appointee as interim head of an independent agency.
“This was a choice we made very deliberately and the notion that that was just a suggestion on our part and that the president can pick or choose [a CFPB successor] makes no sense,” Frank said on a conference call with reporters.
Dodd said that under the law, “the president cannot just create a director.”
“We had the choice of keeping the Vacancies Act, but rejected that choice and wrote the language that was in the bill. We did not just call the CFPB an independent agency, we created an independent agency,” Dodd said.
The two sharply criticized former colleague Mick Mulvaney, the director of the Office of Management and Budget, who became interim director of the CFPB on Tuesday after a federal judge declined to grant a temporary restraining order in hearing a lawsuit by CFPB Deputy Director Leandra English.
“He was put there to shut the agency down and keep it from being effective,” Frank said. “They couldn’t get a nominee confirmed who would be as negative at the agency as Mulvaney is. As long as he is the director, the agency will do almost nothing.”
At issue is who would replace former CFPB Director Richard Cordray, who resigned on Nov. 24, naming English as his interim successor.
Democrats continue to claim that English is the legal acting director of the CFPB because Dodd-Frank states that the deputy director shall serve as acting director in the “absence or unavailability of the director.”
The Trump administration has said the Vacancies Reform Act gives the president wide authority over appointments.
The court battle is ongoing. Though he denied the requres for a restraining order, District Judge Timothy J. Kelly of the U.S. District Court for the District of Columbia is expected to rule any day on the rest of the case. Kelly was appointed to the bench by Trump in September.
“I am puzzled by the notion that where there is an existing law, and Congress passes a new law, which takes a different position and carries out the mission that Congress had in mind,” Frank said.
Michael Barr, a law professor at the University of Michigan Law School and a former Treasury official in the Obama administration, said it was clear that the Dodd-Frank provision on succession at the CFPB would apply and not the Vacancies Act.
“It would be harder to find a clearer explanation of what Congress intended or a clearer legislative history,” Barr said on the call with reporters, which was organized by the Progressive Change Institute. “The statute clearly states the order of succession and is mandatory.”
Neither Dodd nor Frank said they could recall any opposition from Republicans when a reference to the Vacancies Reform Act was dropped from the Senate version of the bill.
“There was never an independent argument about the vacancy act,” Frank said. “Once you decide to have an independent [agency] with a five-year term, the provision falls automatically.”
The language specifying the CFPB’s succession was chosen deliberately, Dodd said, because the authors feared that the agency would be too politicized.
“Here we are confronted with the very exact situation which provoked us to write the statute exactly the way we did,” Dodd said.
The litigation in English v. Trump is just beginning, consumer advocates said.
“The legal fight is far from over,” said Brianne Gorod, chief counsel at the Constitutional Accountability Center. “If you look at the law, to ensure that the bureau would maintain its independence, Congress designated in the act itself who would serve in the event of a vacancy.”
Allowing Trump to name Mulvaney interim director was “a deliberate end run around Dodd-Frank’s mandatory succession provision,” Gorod said.
Both sides in the case have until Friday to provide briefs to Judge Kelly.