Created as part of the Dodd-Frank Act in wake of 2008 Financial Crisis, the Consumer Financial Protection Bureau has a unitary purpose: “watching out for American consumers in the market for consumer financial products and services.” ((Creating the Consumer Bureau, Consumer Fin. Prot. Bureau, https://www.consumerfinance.gov/about-us/the-bureau/creatingthebureau/ (last visited Dec. 7, 2017).)) Its tasks include monitoring financial markets for risks to consumers, rooting out unfair or deceptive practices, and providing financial education to consumers. ((The Bureau, Consumer Fin. Prot. Bureau, https://www.consumerfinance.gov/about-us/the-bureau/ (last visited Dec. 7, 2017).)) Recently, a war has been raging over who will fill the Bureau’s leadership role after Richard Cordray, an Obama-appointee and the Bureau’s first director, abruptly announced he was stepping down. ((Tara Siegel Bernard, Dueling Appointments Lead to Clash at Consumer Protection Bureau, N.Y. Times (Nov. 24, 2017), https://www.nytimes.com/2017/11/24/us/ politics/consumer-financial-protection-bureau-cordray-leader-trump-mulvaney.html.)) Before its birth, the Bureau was opposed by both Republicans and the banking industry. ((Id.)) And in sum, Republicans aim to reduce the Bureau’s reach and Democrats desire to maintain its strong consumer protection stance. ((See id.)) But there’s more than politics involved: there is also a legal battle over who the rightful interim director should be, given that Cordray’s confirmation took years. ((See Id.))
Two acting directors were named upon Richard Cordray’s departure: Mick Mulvaney, also President Trump’s White House budget director, and Leandra English, the Bureau’s then-Deputy Director. ((Renae Merie, The CFPB now has two acting directors. And nobody knows which one should lead the federal agency, Wash. Post (Nov. 24, 2017), https://www.washingtonpost.com/news/business/wp/2017/11/24/the-cfpb-now-has-two-acting-directors-and-nobody-knows-which-one-should-lead-the-federal-agency/?utm_term=.d4a21a5b4813.)) A provision in the Dodd-Frank Act states that the Deputy Director “shall serve as acting Director in the absence or unavailability of the Director.” ((12 U.S.C. § 5491(b)(5)(B).)) The Federal Vacancies Reform Act of 1998 grants the President power to fill an executive agency position if that position is one in which appointment is made by a president. ((5 U.S.C. § 3345(a)(2).)) Legal experts are conflicted over which statute is operative. ((Charlie Savage, Who’s the Real Head of the Consumer Watchdog Agency? A Legal Fight, Explained, N.Y. Times (Nov. 27, 2017), https://www.nytimes.com/2017/11/27/business/cfpb-mulvaney-leandra-english-legal-explained.html.)) In an attempt to resolve the matter, Ms. English sued in federal court for a temporary restraining order preventing Mr. Mulvaney from taking the acting Director position. ((Victoria Guida, Court sides with Trump in CFPB leadership dispute, Politico (Nov. 28, 2017 6:06 PM), https://www.politico.com/story/2017/11/28/trump-court-mulvaney-consumer-protection-bureau-265051.)) That TRO was denied by U.S. District Judge Timothy Kelly. ((Id.)) Judge Kelly noted that Ms. English had failed to show that her case would succeed on its merits, and “on its face, the [Vacancies Reforms Act] does appear to apply to this situation.” ((Id.)) Ms. English vowed to pursue other avenues of removing Mr. Mulvaney, but for now, it appears that he shall retain his role of acting Director of the CFPB. ((See id.)) So what does that mean for the future of federal consumer protection?
Mr. Mulvaney in 2014 called the Consumer Financial Protection Bureau a “sick, sad” joke. ((Victoria Guida, Trump taps Mulvaney to head CFPB, sparking confusion over agency’s leadership, Politico (Nov. 24, 2017 4:45 PM), https://www.politico.com/story/2017/11/24/richard-cordray-successor-cfpb-leandra-english-259612.)) He has also referred to the Bureau as “a wonderful example of how a bureaucracy will function if it has no accountability to anybody.” ((Id.)) Upon assuming office, he declared, “This place will be different, under my leadership.” ((Jessica Silver-Greenberg & Stacy Cowley, Consumer Bureau’s New Leader Steers a Sudden Reversal, N.Y. Times (Dec. 5, 2017), https://www.nytimes.com/2017/12/05/business/cfpb-mick-mulvaney.html.)) Indeed, it has been. Mr. Mulvaney has “froze[n] all new rule-making and ordered a review of active investigations and lawsuits. Some, he has indicated, will be abandoned.” ((Id.)) He also temporarily stopped payments to financial crime victims before reinstating them. ((Id.)) Mr. Mulvaney, however, has stated that he does not intend to “gut” the agency. ((Gillian B. White, What’s at Stake in the Fight Over the CFPB, Atlantic (Dec. 5, 2017), https://www.theatlantic.com/business/archive/2017/12/cfpb-fight/547466/.)) That being said, Mulvaney requested $0 for its Q1 2018 budget, intending instead to draw upon reserves. ((Yuka Hayashi, CFPB Requests $0 Budget, Will Draw Down Reserves Instead, Wall St. Journal (Jan. 18, 2018), https://www.wsj.com/articles/cfpb-requests-0-budget-will-draw-down-reserves-instead-1516291949.)) The future of the CFPB is unclear, but with acting Director Mulvaney’s history of angst with the Bureau and his recent changes, serious concerns exist for consumers.