The manufactured ‘crisis’ over the Consumer Financial Protection Bureau


The latest attempt by Donald Trump to fill the D.C. swamp with his loyal cronies to destroy federal agencies he does not like is this manufactured “crisis” over who will head the Consumer Financial Protection Bureau.

This fake “populist” is actually a big supporter of the banksters of Wall Street, the The Predator Class whose unbridled avarice and greed led to The Mortgage Fraud Scandal, The Biggest In Human History, that nearly destroyed the U.S. economy and the world’s financial system.

Donald Trump, a grifter and con man himself, believes the banksters of Wall Street were the real victims in this financial scandal, and that they should be freed from the minimalist banking regulations enacted in the Dodd-Frank Act to allow them to once again prey on consumers victims again, something you would expect a grifter and con man to say. Casting Wall Street as Victim, Trump Leads Deregulatory Charge.

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The Twitter-troll-in-chief”s tweet is, of course, total bullshit, as Philip Bump of The Post explains. Trump once again rises to Wall Street’s defense:

This isn’t true: Banks have repeatedly set new quarterly records on incomes over the past several years, including in the second quarter of 2017. If that’s devastation, sign me up.

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Bloomberg News’s editorial board, in an editorial praising the watchdog agency, described some of its successes: “It created the first federal rules to make payday lending less predatory. It gave the public reams of valuable information, such as a database that allows consumers to compare credit-card agreements. Its practice of publishing complaints pushed financial institutions to be more responsive. Its investigation of Wells Fargo brought national attention to the fake-accounts issue.”

The latest manufactured “crisis” began Friday afternoon when Richard Cordray, the Obama-appointed leader of the bureau, abruptly announced he would leave the job at the close of business, a week earlier than anticipated. He followed up with a letter naming his chief of staff, Leandra English, as the agency’s deputy director. Dueling Appointments Lead to Clash at Consumer Protection Bureau:

The White House retaliated, saying that the budget director, Mick Mulvaney, who once characterized the consumer protection bureau as a “sad, sick joke,” would be running the agency. [Mick Mulvaney Wanted to Eliminate the Consumer Financial Protection Bureau. Now Trump’s Putting Him in Charge of It.] He would also keep his current job as head of the Office of Management and Budget.

Mr. Mulvaney said he would assume the additional role until a permanent successor was found.

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The conflicting appointments were a fitting development for an agency under constant attack from Republican leaders, and it leaves supporters wondering about the agency’s future with Mr. Trump in the White House and Republicans in control of both houses of Congress.

Leandra English, the deputy director of the Consumer Financial Protection Bureau, has filed a lawsuit to block President Trump’s nominee from becoming its acting director. Battle for Control of Consumer Agency Heads to Court:

Leandra English, the deputy director of the bureau who was set to become its temporary chief, filed a lawsuit late Sunday night to block Mr. Trump’s choice of someone else from taking control of the agency on Monday morning.

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Ms. English, an agency veteran, was appointed to the deputy director position hours later. In a letter, Mr. Cordray said the appointment would make her the agency’s acting director under the terms of the law that created the agency.

But Mr. Trump is citing a different federal law in his effort to appoint Mr. Mulvaney. The dueling appointments left it unclear who would be running the agency on Monday.

Ms. English is looking to the United States District Court for the District of Columbia to resolve the dispute. The lawsuit she filed seeks a temporary injunction to halt Mr. Mulvaney’s appointment.

“The President’s attempt to appoint a still-serving White House staffer to displace the acting head of an independent agency is contrary to the overall statutory design and independence of the bureau,” Ms. English wrote in her lawsuit.

Leandra English has the correct legal argument here, as explained below. But this case has been assigned to a judge who is a Trump appointee, so we are about to find out whether the independence of the judiciary applying the rule of law still applies in the age of “Trumpism.”

Constitutional law professor Laurence Tribe explains the legal arguments.
Sorry, Mr. President. You can’t make Mulvaney ‘acting’ head of the Consumer Financial Protection Bureau.

Under the explicit text of the 2010 Dodd-Frank financial reform act, which created the CFPB, Deputy Director Leandra English became CFPB’s “acting director” at midnight on Nov. 24, when Director Richard Cordray resigned his post and thereby became “unavailable” within the meaning of the law’s specific provision for that contingency that the deputy director will “serve as acting director in the absence or unavailability of the director.” Even the Justice Department’s Office of Legal Counsel acknowledged, in its Nov. 25 memo to White House Counsel Donald McGahn, that this language applies, conceding that “the resignation of the director would satisfy the requirement of ‘absence or unavailability.’ Therefore, the statute would permit a properly appointed deputy director to serve as the acting director during a vacancy.”

Yet OLC concluded, unconvincingly, that the 1998 Federal Vacancies Reform Act still leaves the president with the option of installing Mulvaney, even though that statute’s own terms explicitly state that it doesn’t kick in when another agency-specific statute (here, the subsequently enacted provision of Dodd-Frank) “designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity.” The OLC analysis treated that language as inconclusive because the “Vacancy Reform Act itself, like the CFPB-specific statute, similarly uses mandatory terms,” as if interpreting overlapping statutes were a matter of grammatical classification rather than a matter of making sense of an overall statutory scheme.

However muddled, at least it’s a theory. But CFPB’s general counsel, Mary McLeod, in her own Nov. 25 memo, offers a wholly incongruous legal gloss. She doesn’t rebut OLC’s concession that the vacancy created by Cordray’s resignation triggers the agency-specific succession provision of Dodd-Frank — but she doesn’t exactly accept it, either. Instead, she toys with various definitions of “unavailability” as she attempts to advance the idea that the director’s resignation makes his status something other than “unavailable” (an alternative status she never quite articulates), winding her way to the notion that Congress may have intended “unavailability” to mean something temporary, not permanent.

What is important here is the legislative history of the Dodd-Frank Act. Here is an index to A Brief Legislative History with Links, Reports and Summaries. Here is a discussion of the point in contention from Georgetown University law professor Adam Levitin at NPR. How The Dodd-Frank Act Plays Into The CFPB Succession Debate:

SIEGEL: Take us back to the year 2010 when the Dodd-Frank Act wasn’t yet law but versions of it had been approved by both houses of Congress both controlled by Democrats at the time. You point out that the House version in fact did apply, the very federal law that the Trump administration has invoked – Senate bill didn’t. What happened?

LEVITIN: Well, the House – as you said, the House bill said that this law called the Federal Vacancies Act would control the succession for the CFPB directorship. The Senate bill had different language. The Senate bill said that upon the absence or unavailability of the director, the deputy director shall – emphasis on that word shall – become the acting director.

These two bills went into conference committee, and we don’t know exactly what happened in that sealed room. There was the white smoke and the black smoke. And when it emerged, we had the Senate language being adopted. And that itself is I think a good indication that Congress decided not to apply the Vacancies Act to the Consumer Financial Protection Bureau.

SIEGEL: So first of all, I should ask. I mean, was it clearly intentional that the Senate language was used, or was this just in all of the chaos of writing a big piece of legislation?

LEVITIN: We can’t say for sure, but certainly that was the language that they chose. And I think that one can make – can learn something by seeing what they chose to reject in this case.

So under both the legislative history and plain text of the Dodd-Frank Act, the Vacancies Act does not apply because it was rejected by Congress and superseded by an express succession provision in the Dodd-Frank Act. Case closed. Crisis manufactured.

Professor Levitin explains further:

What I think Congress was trying to do here was – Congress wanted to force the president to have to send someone up through the nomination process. So the issue in this case is not whether Leandra English can remain indefinitely as the acting director of the CFPB. The president can follow the Constitution and nominate someone to be the director of the CFPB. And that person – if they’re approved by the Senate, if they’re confirmed the Senate – will be the director of the CFPB, and that ends the situation.

The problem here is that Donald Trump wants to game the system. He doesn’t want to have to send someone up through Senate confirmation. And instead. He’d rather have Mick Mulvaney serve simultaneously as OMB director and CFPB director and do that presumably almost indefinitely, probably until the last minute, then nominate someone who would have five years as director running from that date.

Professor Tribe concludes:

Mary McLeod’s argument comes across like something cooked up to support a preordained result — namely, that there must be some rationale for installing Mulvaney at CFPB for the time being without going through a Senate confirmation hearing for him, or for anyone else.

This is a shameful way to hamstring an agency vital to the protection of consumers from financial malfeasance. Deputy — actually, Acting — Director English has sought a temporary restraining order to prevent Mulvaney from taking over the CFPB before this issue can be adjudicated. If Trump manages to put Mulvaney in the director’s chair before a court can rule, it’ll mean that the president has usurped the prerogatives of Congress on the way to installing his own loyalist to kneecap an agency created to protect main street from the excesses of giant banks and credit card companies. It would be an executive-branch power grab; one that gives foul new meaning to the notion of what it means to “occupy” Wall Street.

Despite legal dispute over his job, Mick Mulvaney waltzed in to first day as CFPB acting director with donuts on Monday. The Trump administration did not file its response to Leandra English’s lawsuit until after midnight, early this morning. Stay tuned.


  1. Democrats should be hammering that Republicans don’t believe in protecting consumers from financial predators. At least the ones not owned by them.

  2. And Wells Fargo is in the news again today for overcharging people.

    I work for a Too Big To Fail institution, trust me, we need the CFPB.

    In fact, we should be doubling the CFPB.

    Remember Trump just delayed Obama’s fiduciary rule a few months ago, which would require financial planners to work in the customer’s best interest and not their own.

    We really needed that rule, too, I’ve seen family members robbed of tens of thousands by financial planners, and the financial planners walked away rich.

    What were the Trumpaloompa’s thinking, that a Manhattan con man was going to look out for their interests?

    The GOP is a scam.

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