The Credit Union National Association on Tuesday filed an amicus brief supporting President Trump’s appointment of Mick Mulvaney as acting director of the Consumer Financial Protection Bureau.
Leandra English, who was appointed as deputy director shortly before former director Richard Cordray left office, is suing the president over Mulvaney’s appointment, contesting the legality of his position at the bureau.
CUNA’s brief comes as multiple states’ attorneys general have said Mulvaney is unfit to lead the bureau and more than 30 current and former Democratic lawmakers have filed a court brief opposing Mulvaney. A number of consumer advocacy groups have also filed briefs opposing Mulvaney.
“Americans deserve better than the political theater playing out at the CFPB right now,” Jim Nussle, CUNA president and CEO, said in a press release announcing the amicus brief. “It is important to have a process in place which assures leadership of the CFPB has transparency. We disagree that a non-accountable individual leaving office has Presidential appointment powers with no checks and balances in place."
The brief is centered around two arguments: That the language in the Consumer Financial Protection Act does not provide a rule of succession for the bureau’s director ot appoint his or her own successor, and that setting a precedent for the director of the CFPB to name a successor would make the agency even more troubling for judges constitutionally.
The first argument notes that Congress is not unfamiliar with the words “vacancy” or “resignation,” but that the Dodd-Frank Act which created the CFPB only makes reference to appointing an acting director in the director’s “absence or unavailability,” such as in the event of hospitalization
“This is the key language,” said Alan Kaplinsky, co-practice leader of Ballard Spahr LLP’s Consumer Financial Services Group, in a CUNA conference call. “That language is plainly inapplicable to the succession of a former CFPB director who no longer serves in office.” Without language for succession authority, the president has the ability to appoint an acting director via the Federal Vacancies Reform Act, he added.
The second argument was made in light of PHH Corporation vs. Consumer Financial Protection Bureau, which challenged the bureau’s leadership structure. The case is now being heard by the entire DC Circuit Court of Appeals with a decision expected soon. Kaplinsky argued that allowing English to serve as acting director would make the constitutionality of the bureau’s leadership structure even more difficult to defend.
“The donnybrook at the CFPB creates tremendous uncertainty for credit unions and members,” Ryan Donovan, CUNA’s VP of advocacy said during the conference call. “The CFPB has final rules waiting ot be implemented, it has proposed rules in the pipeline and it has examiners in the doors of credit unions. Because credit union resources are credit union members’ resources, every rule change, every hour an examiner is in a credit union, it costs credit unions money and complicates the delivery of safe, affordable financial services. When leadership is uncertain, it adds insult to injury for credit unions who seek common sense regulation.”
Donovan pointed out that CUNA was one of the only financial services trade associations that didn’t oppose the creation of the CFPB, but noted that the current controversy was avoidable.
“If there had been a commission in place at the CFPB there would be absolutely no question who would be leading the CFPB now,” he said. CUNA has long pressed for a variety of reforms to the bureau, including changing its leadership structure to that of a multi-member board.