Former Rep. Barney Frank pushed back Saturday on the White House’s assertion that President Donald Trump has the authority to appoint an interim director of the Consumer Financial Protection Bureau, saying the independence of watchdog agency was a key consideration when Congress passed the law to create it in 2010.
“We gave a lot of attention to how to structure the CFPB and how to protect its independence, because its job is to go after some very powerful forces in the economy,” the Massachusetts Democrat, who authored the law with then-Connecticut Democratic Sen. Chris Dodd, told CNN in an interview. He added: “The point is, we intend what [former CFPB Director Richard] Cordray was doing to have this kind of autonomy.”
The Dodd-Frank Wall Street reform law designated that the watchdog’s deputy director would serve as acting director in the event of a vacancy specifically to give the agency independence from the White House, Frank said. When Cordray resigned Friday, he appointed the agency’s chief of staff, Leandra English, to serve as its deputy director, teeing her up to take over as the bureau’s acting director.
But hours after Cordray tendered his resignation, the White House announced that Trump had chosen Office of Management and Budget Director Mick Mulvaney to serve as acting director, setting off a possible legal fight over the leadership of the agency.
“Director Mulvaney will serve as acting director until a permanent director is nominated and confirmed,” the White House said in a statement Friday.
A senior administration official contended Saturday morning that the Federal Vacancies Reform Act of 1998, which gives the President wide latitude to make appointments, took precedence over Dodd-Frank.
“We think that this move is clearly supported by a plain reading of the Vacancies’ Act,” the administration official said on a call with reporters. “The Vacancy Act is a long-established, used by presidents of both parties as a routine function, and we believe this act is consistent with that long-established practice.”
But Frank said the consumer watchdog is “different in every way” from other parts of the federal government in order to protect the agency from undue political influence. For example, its director cannot be easily fired by the President and serves a five-year term, which extends beyond the four-year term of the commander-in-chief.
Massachusetts Democratic Sen. Elizabeth Warren, an architect of the consumer agency, also said in a tweet Friday that under Dodd-Frank the agency’s deputy director assumes the role of acting director if there’s a vacancy.
The President “can nominate the next director — but until that nominee is confirmed by the Senate, Leandra English is the Acting Director under the Dodd-Frank Act,” she wrote.
Warren tweeted Saturday that the issue needed to be decided in the courts.
“If @realDonaldTrump believes he is acting legally by ignoring Dodd-Frank, he should go to court & seek a judgment right away to settle this @CFPB dispute,” she wrote.
Asked how Trump’s choice of Mulvaney could be challenged, however, Frank said: “This is unprecedented. I literally don’t know.”
The departure of Cordray, the first-ever director of the consumer agency and an appointee of President Barack Obama, marks an opening for Trump to overhaul the agency’s leadership.
While serving in Congress, Mulvaney voted in favor of killing the agency, which was created after the financial crisis to protect consumers and keep an eye on Wall Street. Mulvaney and other opponents have argued that the agency has too much power, saying it installs unduly harsh regulations. He has worked alongside Trump to roll back some of the consumer agency’s rules.
