The CFPB designation of Mick Mulvaney is legal


T the question in Washington is: Who should be the acting director of the Office of Consumer Financial Protection? There are two answers: Mick Mulvaney and nobody.

What has happened is this: the director of the bureau, Richard Cordray, has resigned. President Donald Trump appointed his budget director, Mick Mulvaney, acting director until a permanent director can be confirmed by the Senate. But Cordray's deputy, Leandra English, has tried to block that appointment, offering a very novel interpretation of the bureaucratic rule that the deputy director operates as interim director in case the director is not available. She argues that the resignation of the director makes him "unavailable" and, therefore, is his acting director. But a resignation does not make a director unavailable, it no longer makes him the director.

Only the most gullible liberals take the strange English legal argument seriously. The private attorney represents the Englishman in the matter, and the attorney general of the office has come to the conclusion that the Trump administration has the best case, with a "best case" here that means "simple statutory authority". The CFPB is established in the law as an "executive agency" and the Federal Vacancy Reform Act of 1998 explicitly authorizes the president to appoint an interim director when there is a vacancy in a position that requires the presidential nomination and confirmation of the Senate. The law is not ambiguous in the point.

Mulvaney has gone through the Senate confirmation process before, because of his previous position, but if the Senate does not like it for the role, or if President Trump decides to choose another person for the job after Mulvaney serves as interim director, then that corresponds to the Senate or President Trump, respectively, not to the internal administrative team of the CFPB. The president and the senators face periodic elections during which the American people have the opportunity to make judgments on such matters. The deputy director of the CFPB no.

And that is the biggest problem. The leadership structure of the CFPB, which has already been declared unconstitutional by a panel of the Court of Appeals of the District of Columbia, is designed to create a separate power within the federal government, which does not respond to the president, who in the ordinary sphere course of affairs has the power to dismiss and replace executive agency officials, or Congress, and is therefore outside of ordinary democratic oversight. That is a recipe for abuse, and that abuse is not hypothetical: the office has already been forced to revert when Cordray, without legal authority, unilaterally increased the fine in a case of mortgage insurance from $ 6 million to $ 103 million. A federal bureaucrat who can impose hundreds of millions of dollars in fines under his own authority, immune from the ordinary responsibility of the executive branch and enjoying extensive jurisdiction in the financial industry, is positioned to become a top-ranked extortion artist , that the cynic among us has always believed that it was precisely what the CFPB intended to be. Elizabeth Warren and others did not come up with this by accident.

The agency's leadership structure, which protected the director from being dismissed by the president except for a good cause – whatever that might mean – was declared unconstitutional by the panel, which issued a decision that throws out only the provision for cause, along with that fine of $ 103 million. The full court is expected to resolve the issue, which can very well be addressed to the Supreme Court.

It is an executive agency, not a court or a legislative body, and executive branch officials are accountable to the president. .

We have three branches of government, and the CFPB is in one of them: it is an executive agency, not a court or a legislative body, and executive branch officials are responsible to the president. There are some other agencies that have similar quasi-independent directors, and they, like CFPB, are constitutional chimeras, although most of them are obscure and do not enjoy anything like the princely powers of the CFPB. The simplest solution would be to dissolve the office completely. Its legitimate functions are better handled by banking regulators and other financial oversight agencies, and its deeply political nature – already in such a dramatic display – makes it less than credible as an impartial regulator.

President Trump is well positioned for a short long-term victory in this matter. For a more substantial victory, you must help take the CFPB to a deep and unmarked legislative tomb.

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