When Richard Cordray announced earlier this month that he would be resigning as Director of the Consumer Financial Protection Bureau (CFPB), the White House saw an opportunity: here was its chance to try to cripple an agency that has achieved remarkable successes on behalf of American consumers.  The White House quickly announced that it was considering naming President Trump’s Director of the Office of Management and Budget, Mick Mulvaney, to be the Bureau’s interim head, the same Mick Mulvaney who once described the CFPB as “a sad, sick joke.”  As has so often been the case over the past ten months, there’s one important thing standing in the way of this White House and its desired objective: the law.

When Congress established the CFPB in the Dodd-Frank Wall Street Reform and Consumer Protection Act, it determined that the Bureau needed to be an independent regulator, insulated from direct presidential management and control, to remain a vigilant guardian of consumers’ interests.  It needed, in the words of a Senate report, to be “strong and independent.”  Toward that end, Congress structured the Bureau to enhance its independence, giving it an independent funding source and protecting its Director from removal except for good cause.  (Congress’s choice to limit the grounds for removing the Director is presently the subject of a constitutional challenge in the D.C. Circuit.)

To preserve the Bureau’s independence, Congress did another thing, as well: it provided that in the event of a vacancy, the Bureau’s Deputy Director, appointed by the Director, would serve as acting Director of the Bureau until a new Director was named by the President and confirmed by the Senate.  In the language of the Act, the Deputy Director “shall . . . serve as acting Director in the absence or unavailability of the Director.”  In other words, if the Director is “absen[t],” that is, “not existing,” the Deputy Director is acting Director.  Before resigning, Richard Cordray appointed Leandra English Deputy Director, which means that English is required to “serve as acting Director” until there is a new Senate-confirmed head for the Bureau.

But when has President Trump let the law stand in his way?  What if President Trump announces that he’s naming Mulvaney to serve as the Bureau’s new interim head anyway?  To be sure, there is a law called the Federal Vacancies Reform Act, which provides that the President generally “may direct a person who serves in an office for which appointment is required to be made by the President, by and with the advice and consent of the Senate, to perform the functions and duties of [a] vacant office temporarily in an acting capacity,” subject to certain time limits.  Having been confirmed by the Senate to be OMB Director, Mulvaney meets these criteria.  But unfortunately for the White House, and fortunately for the American people, the FVRA doesn’t apply here.

First, there’s the plain text of Dodd-Frank.  As noted, Dodd-Frank’s language is mandatory, providing that the Bureau’s Deputy Director “shall” serve as acting Director.  On top of that, Dodd-Frank was enacted more recently than the FVRA.  Moreover, its language here is more specific than that of the FVRA, focusing narrowly on the head of one particular agency, as opposed to supplying general rules for all executive offices.  As the Supreme Court has explained more than once, “‘[I]t is a commonplace of statutory construction that the specific governs the general.’” 

Second, concluding otherwise—that the FVRA trumps Dodd-Frank’s mandatory language—would undermine Congress’s overall statutory plan for the CFPB.  As noted above, Congress determined that the Bureau needs to be independent to be an effective regulator.  If the President can appoint his own chosen successor pursuant to the FVRA, it would mean that the CFPB could be headed—potentially for many months—by an acting Director hand-picked by the President without the check of Senate confirmation.  That interpretation would thus deprive the CFPB of the independence that was central to Congress’s plan in establishing the Bureau.

Significantly, nearly all independent agencies are structured so as to prevent Presidents from achieving what President Trump is attempting here.  Most independent agencies are headed by multi-member boards or commissions, and the authorizing statutes for those agencies do not provide for the temporary replacement by the President of board members or commissioners who leave office before the end of their terms.  The FVRA similarly withholds from the President the authority to temporarily replace board members and commissioners of multi-member independent agencies.  (Notably, such agencies can continue to function while awaiting the appointment of a new Senate-confirmed member, unless a quorum is lost.)  The legislation creating the Federal Housing Finance Agency, an independent agency that like the CFPB is led by a single director, similarly restricts the President’s choice of a temporary replacement when the director leaves office: the President is limited to choosing among three existing Deputy Directors of the agency.  These considerations bolster what the plain text of Dodd-Frank already suggests: the Deputy Director of the CFPB automatically becomes acting Director in the event of a vacancy, and the President does not have authority under the FVRA to make his own choice of acting Director instead.

Moreover, the legislative history of Dodd-Frank also supports this conclusion.  The bill that passed the House of Representatives in December 2009 did not provide for a Deputy Director of the CFPB.  Instead, it explicitly stated that when the Director’s office became vacant, a temporary replacement had to be appointed in the manner provided by the FVRA.  The Senate bill introduced and passed months later, the language of which prevailed in conference, was the origin of the present statutory language.  The change seems to reflect Congress’s considered decision that the FVRA should not govern succession in the event of a vacancy in the Director position; instead, as the language of the statute as enacted suggests, the Bureau’s second-in-command should take over until a new Director is appointed by the President and confirmed by the Senate. 

Finally, it’s immaterial that Dodd-Frank does not expressly refer to a vacancy in the office of the Director, but instead refers more generally to “the absence or unavailability of the Director.”  While some statutes governing succession in office refer explicitly to vacancies, the legislators who drafted and voted on Dodd-Frank chose broad language—“absence or unavailability”—that naturally covers situations in which a CFPB Director has left office.  Moreover, Dodd-Frank provides that the Deputy Director shall “serve as acting Director,” thus using the same language the FVRA uses when it makes clear that agency organic statutes can provide their own order of succession, notwithstanding the FVRA default rule.  By tracking that language, Congress signaled its intent to place the CFPB within that exception to the FVRA’s default rule. 

In sum, under Dodd-Frank, now that Richard Cordray has resigned as Director, the CFPB’s Deputy Director is the Bureau’s acting Director.  President Trump may decide he doesn’t care what Dodd-Frank says, but he doesn’t get the final say.  If there ends up being a dispute about who’s the rightful head of the CFPB, the final say will rest with the courts.  And if the courts follow the text, structure, and history of Dodd-Frank, it’s clear what they should say: Leandra English is currently the acting Director of the CFPB. 

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