Cordray Resignation Sets Up Conflict Over Who Leads CFPB on Interim Basis

Consumer Financial Protection Bureau Director Richard Cordray officially resigned on Friday and in so doing set up a legal conflict over who will lead the agency until the next director is nominated by the president and confirmed by the Senate.

Shortly before he resigned, Cordray designated CFPB Chief of Staff Leandra English as deputy director of the agency. The deputy director position has gone unfilled on a permanent basis for more than two years, but the Dodd-Frank Act designates the deputy director to serve as acting director of the CFPB in the “absence or unavailability” of a director. Cordray stated that English would now be acting director.

The White House took the position that the Federal Vacancies Reform Act applies, allowing the president to name a currently serving Senate-confirmed official as acting director. Late Friday, President Trump designated Mick Mulvaney, director of the Office of Management and Budget, to serve as acting CFPB director.

A legal opinion released  by the Justice Department’s Office of Legal Counsel on Saturday concluded that naming an acting director under the Vacancies Act remains an “available option” to the president. The CFPB’s own general counsel also concluded that Trump has the authority to appoint an acting director and “advise[d]all Bureau personnel to act consistently with the understanding that Director Mulvaney is the Acting Director of the CFPB.”

Late Sunday night, using outside counsel, English filed suit in federal court seeking a declaratory judgment and an emergency temporary restraining order to block Mulvaney’s appointment. It was not clear whether she was filing the lawsuit on behalf of the CFPB or as an individual. The American Bankers Association is following the situation closely.