DOJ Files Brief as DC Circuit Preps for Arguments in CFPB Leadership Squabble

The U.S. Department of Justice this week filed its opposition brief to an appeal made by Consumer Financial Protection Bureau (CFPB) Deputy Director Leandra English in her bid to unseat Mick Mulvaney as interim director of the consumer watchdog. English filed her opening brief late last month.

In dispute is whether the provisions of the Dodd-Frank Act that authorize the deputy director to lead the Bureau in the absence of the director or the Federal Vacancies Reform Act (FVRA) that allows the President to appoint a temporary caretaker are controlling. The legal debate kicked off the day after Thanksgiving when Richard Cordray announced he would be stepping down as director of the CFPB to pursue the governor’s office in Ohio.

In his final act before leaving the position, Cordray promoted his chief of staff, Leandra English, to the job of deputy director and informed the agency that she would act as interim director until a permanent replacement could be confirmed by the Senate. Later that same day, President Trump used his authority under FVRA to install his budget director, former South Carolina representative Mick Mulvaney, as interim chief of the CFPB. The dueling appointments created considerable confusion at the agency, and English filed a lawsuit in federal district court in search of a judicial opinion supporting her leadership.

Instead, the federal district judge found that Dodd-Frank and the FVRA could be read harmoniously. Dodd-Frank allows the deputy director to ascend to the temporary leadership role, but that does not preclude the President from naming an interim director to supercede the Dodd-Frank authorization.

For the past 4 months, Mulvaney has performed the responsibilities of interim director, splitting his days between the CFPB and the Office of Management and Budget. He wasted little time beginning an overhaul of the Bureau, including reconsidering the Small Dollar Rule, requesting public comment on every facet of the agency’s operations, and voluntarily dismissing actions brought by the Bureau’s enforcement division.

Oral arguments before the D.C. Circuit are scheduled for April 12th.