Hearing set on CFPB leadership dispute, as acting/deputy directors face off

A federal court is scheduled to hear arguments Friday over why it should (or should not) issue a preliminary injunction declaring the deputy director of the Consumer Financial Protection Bureau (CFPB) the true director of the agency – or leave the acting director in the post.

CFPB Deputy Director Leandra English is asking U.S. District Court Judge Timothy Kelly in Washington to declare her the director of the consumer bureau, asserting that the law setting up the CFPB makes her so. She was appointed to her current post by outgoing Director Richard Cordray (who resigned shortly after appointing her). English points to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), which states the deputy director takes over in the absence of the director.

President Donald 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.

Kelly denied a request by English late last month for a temporary restraining order to block Mulvaney from taking the director’s seat; he has served as de facto director of the agency since then. Kelly’s decision then could not be appealed, but he did allow the motions for a preliminary injunction to move forward. A decision resulting from today’s hearing could be appealed.