The Trump Administration is attempting an illegal power play in order to geld America’s Consumer Financial Protection Bureau (CFPB) by appointing a career Republican politician who has disparaged the agency as its acting head.
Over the weekend, President Trump illegally named Mick Mulvaney to be the CFPB’s Acting Director, who is a former-House Republican, Tea Party politician who continues to serve simultaneously as the partisan White House Director of the Office of Management and Budget.
In response, Consumer Financial Protection Bureau (CFPB) Acting Director Leandra English just filed a lawsuit to evict President Trump’s unlawful appointee from office. Both Mulvaney and English showed up to work at the CFPB today, but over the weekend Acting Director English had filed a lawsuit (embedded below) aiming kick Trump’s pick out of office, in which she told the court:
The President’s attempt to appoint a still-serving White House staffer to displace the acting head of an independent agency is contrary to the overall statutory design and independence of the Bureau.
The President apparently believes that he has authority to appoint Mr. Mulvaney under the Federal Vacancies Reform Act… but the Vacancies Act, by its own terms, does not apply where another statute “expressly… designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity,” which is exactly what the Dodd-Frank Act does. The President’s interpretation of the FVRA runs contrary to Dodd-Frank’s… mandatory text.
An earlier version of the Dodd-Frank Act, which would have specifically allowed the President to use the Vacancies Act to temporarily fill the office, was eliminated [when Congress considered the bills] and replaced with the current language designating the Deputy Director as the Acting Director [which was passed into law where it remains today].
Richard Cordray was the CFPB’s first and only Director, appointed Leandra English as his top deputy prior to his resignation last week, which elevated her to Acting Director upon his departure.
The federal law authorizing the CFPB was specifically written to preclude any future president from appointing an Acting Director, but President Trump blithely appointed his crony, Mulvaney, to head the critical regulator anyway.
The CFPB’s General Counsel wrote a memo over the weekend agreeing to defend Mulvaney against Turner’s lawsuit, perhaps deciding that job security was in jeopardy after watching the Trump Administration very publicly fire and denigrate lawyers who take a stand in favor of the law as written, like they did to former Acting Attorney General Sally Q. Yates.
This shows how Trump’s actions are already starting to erode the independence of our institutions.
Financial regulations established the CFPB as an independent bank and consumer finance regulator in response to the GOP’s laissez-faire deregulatory policies, which led to the financial panic and economic collapse known as the Great Recession in 2008.
Since then, the CFPB has returned millions of dollars in stolen funds to the American people and brought justice against financial institutions like Wells Fargo who have been exposed taking advantage of their customers. The New York Times reports:
At stake is the immediate future of the consumer bureau — one of the last holdouts, within the federal government, against Mr. Trump’s efforts to strip away business regulations. While Mr. Trump can appoint his own director, confirmation could take months and slow down Republican efforts to defang the agency.
Under the leadership of Richard Cordray, the departing director, the bureau aggressively used its powers to develop new rules and punish companies that broke existing ones. It targeted abusive debt collectors and bolstered protections for mortgage borrowers. Under Mr. Cordray, it won nearly $12 billion in refunds and canceled debts for 29 million consumers.
Before the CFPB was established, banks could give out loans without any proof of income like tax returns, pay stubs or bank statements – then ruin lives when the loans weren’t paid back.
The CFPB’s carefully crafted consumer protections will disappear if Republicans politicize the non-partisan agency’s mission and allow “liar loans” – the literal industry definition of some of the banned practices – just to funnel more cash to Wall Street’s financial engineers for making mortgage loans untrustworthy again.
America needs an independent watchdog to reign in Wall Street and the too big to fail banks that dominate our country’s financial landscape – and if Trump gets his way, it’s only a matter of time before he tanks the economy.
Here is a copy of the lawsuit: