The statute creating the Consumer Financial Protection Bureau (CFPB) protects it from presidential will, an attorney for the claimant to the top position at the agency told a federal appeals court Wednesday.
However, an attorney representing the government – and thus President Donald Trump – argued that provisions in the law creating the agency cannot stop the president from replacing an acting director, either “at will” or “for cause.”
In arguments before the U.S. Court of Appeals for the D.C. Circuit in Washington in the case of Leandra English (the deputy director of the bureau) versus Trump and CFPB Acting Director John M. “Mick” Mulvaney, English’s attorney Deepak Gupta argued that the appeals court’s decision last year in another case (PHH v. Richard Cordray, the former director of the bureau) recognized that the statute creating the agency (the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010) was designed to preserve the independence of the agency from presidential will.
“It would be quite strange if the court allowed this independent agency to be taken over by the president” in light of that decision, Gupta argued.
Gupta’s client Leandra English argues that she, as the deputy director appointed last fall by outgoing Director Richard Cordray before he resigned, should be the acting director. In asserting her claim to the acting director’s position, English has pointed to the Dodd-Frank act, which states the deputy director takes over in the absence of the director.
President Trump, however, appointed Office of Management and Budget Director Mick Mulvaney to be acting CFPB director the day Cordray stepped down (Nov. 24). Trump pointed to the Federal Vacancies Reform Act of 1998 (FVRA), which gives the president the power to appoint replacements for federal leadership vacancies.
In response to English’s arguments by Gupta, Department of Justice Attorney Hashim M. Mooppan (representing Trump and Mulvaney as appellees) argued that FVRA supersedes the Dodd-Frank statute’s provisions stating that the director can only be removed by the president “for cause.” He also argued that the “for cause” provision does not transfer to the acting director.
The person holding that position, he argued, can be removed at the will of the president.
He also rejected English’s argument (via Gupta) that the CFPB is not answerable to the OMB. He argued that if the president selected an acting director and ordered that person to run everything by the OMB, “that person would likely do so” on pain of being removed by the president.
In rebuttal, Gupta (representing English) suggested that Congress, in establishing the bureau, did not want to have someone serving at the head of the CFPB “indefinitely” at the pleasure of the president (such as the acting director, after appointing a deputy director, resigns – and is then replaced by the deputy director indefinitely in the post).
The court took the arguments under advisement.