The Myriad Irregularities of the Mulvaney "Appointment"

I want to emphasize just how irregular and probably illegal the Trump administration's attempt to make OMB Direct Mick Mulvaney the acting Director of the CFPB really is.  

First, there's the problem that it's hard, nay impossible, to read the Federal Vacancies Reform Act and Consumer Financial Protection Act and the relevant legislative history and come away thinking that the FVRA clearly controls.  At most, there's ambiguity; I can't imagine a competent attorney writing a legal opinion that says anything more than that.  

Second, even if one believes that the FVRA governs or even might govern, it does not mandate Mulvaney's appointment as acting Director.  Instead, the default setting under the FVRA is that the CFPB's Deputy Director would become the acting Director. Thus, if one believes there is statutory ambiguity, the prudent position would be to let the CFPB Deputy Director serve as acting Director, and proceed expeditiously to nominate a permanent Director for the Bureau. President Trump could have sent the Senate a nomination for a CFPB Director today. He didn't. Instead, he decided to put in place a cabinet member who already has substantial duties without running a second federal agencies. (Of course, Mulvaney's plan, it seems, is to only run one agency and shut down the other, so maybe it isn't actually double duty.) I'd be quite surprised if the President nominates anyone to be a permanent Director--the plan is to keep Mulvaney in place for as long as possible. That's not a good faith approach to the issue.  

Third, there's a Mulvaney-specific problem. Mulvaney is a cabinet officer who serves at the pleasure of the President.  That role is inconsistent with that of the head of an independent agency who can be removed only for cause.  By wearing two hats, Mulvaney would inherently compromise the CFPB's independence from the White House. And given that the CFPB Director is also an FDIC Director, the problem exists there too.  Serving in the executive branch in an at-will cabinet position and a for-cause independent agency position simultaneously seems unconstitutional, as a separation of powers violation:  when agencies engage in rulemaking, they are exercising the legislative power. That's a power that's forbidden to the executive. And putting that aside, can one really imagine that having the Treasury Secretary also serving simultaneously as the Federal Reserve Chair and SEC Chair would be permissible? Even if the FVRA were to apply, choosing Mulvaney is problematic. 

What we see here, then, is an approach that disregards the rule of law. But that shouldn't come as any surprise in this administration. 

 

Comments

[Thomas Wicklund]

I'm curious about the Deputy Director for the CFPB. When I do a search I find that David Silberman was named acting Deputy Director on Jan 7, 2016 (almost 2 years ago).

Now today is a report that Leanne English has been named the "official" Deputy Director.

Strangely, the Bureau Structure web page (https://www.consumerfinance.gov/about-us/the-bureau/bureau-structure/) states it was last updated October 26, 2017 and lists Ms. English as Deputy Director. Either her name was already on the web site a month ago or the CFPB's "last updated" field is fiction.

So who has been Deputy Director? Have we had an acting Deputy Director for almost 2 years until Mr. Cordray names somebody else at the last minute? Since the Deputy Director is named by the director and apparently doesn't need to be confirmed by the Senate, why have an "acting" Deputy Director at all? The law appears to be silent on the term of the Deputy Director, does the Deputy Director serve at the pleasure of the Director?

Mr. Trump's nomination of an acting Director may be illegal and I agree that appointing Mr. Mulvaney is highly irregular.

However, if I read this correctly, up until today you would have expected Mr. Silberman to be acting director. Instead Director Cordray, on his last day as Director, named somebody new and unexpected as Deputy Director and thus as acting Director.

This may be strictly legal yet it also seems irregular. I'm sure Congress, if it intended that the Deputy Director should become acting Director, did not consider or intend that the outgoing director should be able to name his successor on his last day.

[Adam Levitin]

The Last Updated field is incorrect.

The authority to appoint a Deputy Director is vested solely in the Director, whom I believe serves at the pleasure of the Director. David Silberman was acting Deputy Director until yesterday. He had been acting Deputy for some time; I do not know why he remained only an acting Deputy, rather than a permanent one. Leandra English, who had been serving as chief-of-staff, was appointed as the permanent Deputy Director.

Director Cordray's farewell letter explained that the appointment of Ms. English was to ensure a smooth transition. I don't know why the last day particularly matters from a legal or a policy perspective. What would be different if Ms. English had been named two months ago? Nothing as far as I can tell.

None of this bears on which statute governs the succession. If Mr. Silberman were still acting Deputy Director, he would then have acceded to being acting Director upon Director Cordray's resignation.

[S]

Can you explain how a court battle would work for this? What happens if both English and Mulvaney show up Monday?

[Ros Po]

I prefer you keep your comments neutral and not include what appears to be ultra lib philosophies such as those in which you ended the article with, "What we see here, then, is an approach that disregards the rule of law. But that shouldn't come as any surprise in this administration." You could have left the last sentence out.........it did nothing to add to the article except reveal your true political feelings.

[Adam Levitin]

You'd prefer that I, the blogger, keep my comments neutral? Kiss off. It's my blog, not yours.

Why would my political beliefs in any way vitiate my analysis? If you've got a problem with my analysis, fine, then attack it, but if you assume I'm wrong because of my politics, you're just making a flavor of ad hominem argument. As it happens, my comment about this administration's record regarding rule of law is well-supported by its record in court. I'd present that as a matter of fact, not opinion or philosophy.

As for my supposed ultra lib philosophies, you might want to research me better.

[Ebenezer Scrooge]

The statutory analysis seems fine, but I'm not sure about the Constitutional analysis. Many of the non-independent agencies promulgate regulations all the time. Consider the Treasury's TRADES regulation. Or HUD regulations. Etc.

What puzzles me are the published reports that the OLC has gotten involved in this mess. They don't like to opine overnight, and (Yoo aside) are traditionally nonpolitical.

[Adam Levitin]

Scrooge is right. There's a separation of powers problem, but I haven't articulated it correctly. Let me work on the formulation.

As far as OLC, I don't have any insight, but OLC's prior work on the FVRA was not in the context of the CFPB, and until we actual see OLC's memo (which ain't done), who really knows what OLC thinks.

[Knute Rife]

Re Ros Po(o): The Powers are such control freaks that they send The Minions trolling your blog to enforce Newspeak and Douplethink? What's next, early morning ad hominem toilet tweets? Oh wait.