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Why The Legal Dispute Over the Leadership of the CFPB Matters

By Michael Landis
Litigation Director

There’s an important legal fight happening right now over the temporary leadership of the Consumer Financial Protection Bureau. And U.S. PIRG Education Fund, along with nine other consumer advocacy groups, just weighed in with a friend-of-the-court brief. Our brief argues that the public interest lies in having the CFPB’s current deputy director, Leandra English, serve as the acting director until a new director is nominated by the President and confirmed by Congress.

The dispute arose following the departure of the former CFPB director, Rich Cordray, who left prior to the conclusion of his five-year term to run for governor in Ohio. Knowing that vacancies were bound to occur, Congress included in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010—the law that created the CFPB—a specific provision clearly stating that the deputy director “shall serve . . . as acting Director in the absence or unavailability of the Director.” Thus, Leandra English (the CFPB’s deputy director) automatically became the agency’s acting director the moment Rich Cordray left office.

Simple, right? Well, the Trump administration saw this as an opportunity to attempt a hostile takeover of the CFPB and install a member of the President’s cabinet as the acting director. Using a general provision of the Federal Vacancies Reform Act of 1998, President Trump purportedly named Mick Mulvaney—the current director of the White House’s Office of Management and Budget—as the acting director of the CFPB. The problem, however, is that the specific provision of Dodd-Frank governs over the general provision of the FVRA. In addition, having a current member of the President’s cabinet serve as the acting director violates the intent of Dodd-Frank, which envisioned the CFPB as an independent financial regulator free from political influence.

To vindicate her right to temporarily lead the CFPB, Leandra English filed a lawsuit in federal district court in Washington, D.C. Following the district court’s denial of her motion for a preliminary injunction, Ms. English appealed to the D.C. Circuit. In her opening brief, she argues that the lower court was wrong when it denied her request for an order temporarily blocking the Trump administration’s unlawful actions and allowing her to continue to serve as the acting director.

In our brief in support of Ms. English’s appeal, we focus on how the public interest will be served by a ruling in Ms. English’s favor. Specifically, we point out that prior to Rich Cordray’s departure, the CFPB vigorously served the public interest because it was able to function as an independent financial regulator exactly as Congress intended. Our brief sets out just a few of the many ways that the CFPB has helped consumers, such as addressing over one million consumer complaints and returning $12 billion in relief to 29 million wronged consumers nationwide. Our brief then argues that without court action in Ms. English’s favor, the CFPB will be stymied from pursuing its mission as an independent regulator and will instead become a politically-driven tool of the Trump administration. This is not what Congress intended when it created the agency and such a result would most certainly not be in the public interest.

The appellate court will hear oral argument from the parties on April 12, and the court will issue its opinion sometime in the weeks or months that follow. U.S. PIRG Education Fund hopes that the court recognizes the public interest and rules in favor of Ms. English.

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