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Fight for Control of CFPB Not Over, Democrats Say

December 1, 2017

By Michaela Kwoka-Coleman

WASHINGTON, D.C. — The fight over the acting director’s chair at the Consumer Financial Protection Bureau (CFPB) is far from over, as Democratic lawmakers and activists plan to challenge last week’s ruling by U.S. District Judge Timothy J. Kelly that denied a temporary restraining order against President Donald Trump’s interim appointee, Mick Mulvaney.

Speaking with reporters during a Nov. 30 media call, former Sen. Chris Dodd and former Rep. Barney Frank, the men behind the Dodd-Frank Act of 2010 which created the CFPB, stressed that the Democratic opposition to Mulvaney is neither partisan bickering nor an attack on the Trump administration.

Last week, as former CFPB Director Richard Cordray announced his resignation, he put his chief of staff, Leandra English, in the line of succession by elevating her to deputy director.

Hours after Cordray’s announcement, Trump appointed Mulvaney — who had been serving as the director of the Office of Management and Budget (OMB) — as acting director, citing his authority through the Federal Vacancies Reform Act (FVRA) of 1988, which allows the president to appoint a replacement.

However, Dodd and Frank said that the legislation bearing their names contains a statute designating the deputy director as the acting director “in the absence or unavailability of the director.”

Mulvaney, who has previously referred to the CFPB as a “sick joke” and tried to dismantle it while a congressman, emailed staff Monday telling them to disregard any emails from English.

“I apologize for this being the very first thing you hear from me,” he wrote. “However, under the circumstances, I suppose it is necessary. I look forward to working with all of you. If you’re at 1700 G Street today, please stop by the 4th floor to say hello and grab a donut.”

No one is denying Trump his right to nominate a director, Frank said, only that Dodd-Frank does not fall under the purview of the FVRA, since the former legislation includes a succession statute that allows the outgoing director to choose the acting director while the Senate confirms a permanent director.

“That was our intent, to strip this away from the politics of the moment, to give consumers the sense of confidence that there was one place here — when it came to their financial services — [where] there would be people watching out for them, regardless of political party or partisanship,” Dodd said.

Frank agreed, saying that it would have been illogical to stress the independence of the CFPB while letting the president appoint its directors through the FVRA.

Dodd, Frank and Rep. Maxine Waters (D-Calif.), who was also part of Thursday’s media call, expressed skepticism over Mulvaney in relation to his views of the bureau and his role as director of OMB.

Already, Mulvaney has frozen the ability of the agency to send out payments to consumers who have been harmed, Michael Barr said.

Barr served as the Department of Treasury’s Dodd-Frank liaison during the legislation’s genesis and is now dean of the University of Michigan’s Gerald R. Ford School of Public Policy.

“I think that the way that he immediately ordered to stop payments to harm consumers is a great indication of what he intends to do the bureau, and I don’t take that lightly,” Waters said.

Giving Mulvaney credit, Frank and Dodd called him “honest,” in that his position on the CFPB and its role is very clear. Mulvaney’s and Trump’s position has Democrats worried about the bureau’s future, given Trump’s campaign promises to dismantle Dodd-Frank.

“If they were serious about it, you wouldn’t take the man who’s the busiest man in Washington right now; he’s in charge of two things: the CFPB and running the government. So the notion that he can do this on his lunch hour, or his breakfast hour with Dunkin Donuts, is ludicrous,” Frank said, taunting Mulvaney’s email to staff Monday. “So obviously he’s put there to shut the agency down and to keep it from being effective.”

Alluding to continuing legal action, Brianne Gorod, chief legal counsel for the Constitutional Accountability Center, said that Mulvaney’s position in the White House would impede on the independence of the CFPB.

“I think that we’re in for a very tough time because of the hatred for Mr. Cordray, the hatred for the bureau, and an attempt by the Republicans, for the most part, to satisfy those industries that have been found guilty of perpetrating fraud,” Waters said. “I am prepared to do everything I can to protect Dodd-Frank.”

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