CFPB Acting Director Remains Disputed Following Federal Hearing | Auto Finance News | Auto Finance News

CFPB Acting Director Remains Disputed Following Federal Hearing

Michael Strawther / CFPB Via Flickr

Control of the Consumer Financial Protection Bureau (CFPB) remains disputed as a federal judge did not make a ruling at the end of 2-hour arguments hearing on December 22.

Leandra English, deputy director of the CFPB, is seeking an injunction to remove the current acting director Mick Mulvaney and install herself as the “rightful director.” Last month, a judge denied English a temporary restraining order to prevent President Donald Trump’s pick from assuming the duties. English was former director Richard Cordray’s pick to succeed his post.

Arguments during the hearing centered around the question of which line of succession is most appropriate and lawful: the Trump administration’s interpretation of the Federal Vacancies Reform Act or English’s interpretation of the Dodd-Frank Act?

Judge Timothy Kelly seemed persuaded by the government’s case. The White House lawyers argued that if a president is delayed or never appoints a permanent director, then the CFPB would be led by someone who has “never been nominated by any president, and has never been confirmed,” according to reports from the hearing.

However, English’s lawyer, Deepak Gupta, argued that senior staff take over agencies all the time during transitions, particularly at the Federal Housing Finance Agency, which has the exact same succession structure as the CFPB.

“It just doesn’t really happen that way [that the White House argues], because the president names someone,” Gupta said. “But until that occurs, the agencies are headed by someone, sometimes staff, who often come from prior administrations.”  

English’s team also argued that Congress set up the CFPB to be independent of the president and that both Trump and Mulvaney’s actions show that has not been the case in the past month, according to a Los Angeles Times account of the hearing.

Gupta cited a Reuters report that Mulvaney is considering dropping tens of millions of dollars in charges against Wells Fargo & Co. for improper mortgage charges that Cordray had signed off on before leaving office. The president also weighed in on the matter via a Tweet earlier this month, which Gupta argued was an attempt by the president to exert his influence over the agency.

“At the very moment that they are saying that there’s no threat to the agency’s independence, the president is tweeting about a particular enforcement matter involving a particular bank,” Gupta told reporters. “That demonstrates better than anything else that the threat to independence here is not just hypothetical but real.”

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