Consumer Bureau Threatened By President’s Assertion He Can Select Temporary Director

With the departure yesterday of director Richard Cordray from the Consumer Financial Protection Bureau, we don't doubt that the President has the authority to nominate a new director of the Bureau. But the President's assertion later that day that he can and would appoint his own temporary or acting director -- at odds with the plain language of two laws --  places the bureau's leadership in crisis.

Before Richard Cordray resigned yesterday as the director of the Consumer Bureau (our statement; Washington Post story; NY Times story), he appointed a well-qualified deputy director, Leandra English. Under the plain language of the Dodd-Frank Act creating the bureau, the deputy director serves as acting director in the absence of the director. The President’s action later that day in nominating his own acting director — OMB czar Mick Mulvaney — places the bureau in what will likely become a Constitutional crisis decided by the courts. 

While we don’t doubt that the President has the authority to nominate a new director of the Bureau, who would serve after Senate confirmation (the advice and consent of the Senate, Constitution: Article 2; Section 2), the President’s action rejects the clear language of Dodd-Frank and leaves the hard-working staff of the Bureau wondering what will happen on Monday if and when two acting directors arrive. Law professor Adam Levitin has explained that relying on a misunderstanding of the Federal Vacancies Act is “wrong” since the Dodd-Frank Act provides for “a different succession.”

“That plain language is an express provision for a different succession, and this makes sense as a policy matter–why design an agency to be insulated from Presidential control, only to hand the keys to the White House whenever the Director leaves before the expiry of his term?”  

Mick Mulvaney already has one job, running the powerful White House Office of Management and Budget. Even if we grant him a presumed ability to multi-task; he is a longtime bureau opponent who has publicly called the Bureau a “sad, sick joke.” Even were he the only acting director, his actions and words leave him unqualified to run the Consumer Bureau. In his case, handing him the keys is akin to handing them directly to Wall Street.

He should simply decline to show up at the Bureau and let Leandra English serve until the Senate confirms a successor to Director Cordray. The nation suffered a financial collapse less than ten years ago, it does not need turmoil at an agency expressly set up to help us recover from that mess.

Leandra English, who we have worked with and who helped stand up the bureau in 2010 and 2011 and has since served in a variety of senior leadership positions at the Bureau and other government agencies, will be an extremely able Deputy Director and acting Director. She will carry on the mission  begun and managed successfully for 6 years by Rich Cordray and his team.

The Bureau’s independence from politicization is vital to helping consumers and their families continue to regain necessary trust in consumer financial markets roiled less than ten years ago by the collapse of the economy. While some have forgotten and others choose to ignore it, that collapse was caused by reckless practices of Wall Street banks and other lenders. The Bureau needs a leader committed to its mission and to preventing a recurrence of the conditions that led to the collapse. It does not need a constitutional crisis. The President’s action only helps achieve the goal of both Wall Street and predatory lenders to defang, defund and eventually dismantle the successful Bureau.

Under its first Director, Richard Cordray, the Bureau has helped restore confidence to American consumers that they shop in a fair financial marketplace, that they won’t be cheated, that they have real choices and that financial wrongdoing will be punished.

U.S. PIRG intends to assist in defending Director Cordray’s lawful appointment of Leandra English as acting director of the Consumer Bureau and to fight to protect the Bureau’s mission. The idea of the Consumer Bureau needs no defense, only more defenders.


Ed Mierzwinski

Senior Director, Federal Consumer Program, PIRG

Ed oversees U.S. PIRG’s federal consumer program, helping to lead national efforts to improve consumer credit reporting laws, identity theft protections, product safety regulations and more. Ed is co-founder and continuing leader of the coalition, Americans For Financial Reform, which fought for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including as its centerpiece the Consumer Financial Protection Bureau. He was awarded the Consumer Federation of America's Esther Peterson Consumer Service Award in 2006, Privacy International's Brandeis Award in 2003, and numerous annual "Top Lobbyist" awards from The Hill and other outlets. Ed lives in Virginia, and on weekends he enjoys biking with friends on the many local bicycle trails.