- - Friday, December 1, 2017

ANALYSIS/OPINION:

Now that U.S. District Judge Timothy J. Kelly has ruled in favor of President Trump’s right to appoint OMB Director Mick Mulvaney as the acting director of the Consumer Protection Financial Board, CFPB deputy-but-not-acting director Leandra English has ensured herself a minor footnote in history – and, if justice and constitutional government reign, a firing at the hands of her new supervisor.

Worse for her, Ms. English’s move may well end up backfiring on her and her Senate allies, Democrats Chuck Schumer and Elizabeth Warren. By drawing attention to the CFPB with a lawsuit based on such flimsy grounds, Ms. English could actually strengthen the hands of those looking to tame the CFPB and bring it under control it has never before been required to recognize.

That her legal challenge to the president’s right to appoint a new acting director would end in failure was never in doubt. Her own agency’s general counsel agreed that the president had the right to make his choice, and sent a memo to agency employees advising them to recognize Mr. Mulvaney as their new boss.

Nevertheless, English may well decide to double down and file a new lawsuit. Her first lawsuit was a request for a temporary restraining order to prevent Mr. Mulvaney from taking the position. Judge Kelly’s ruling in this case – which said he believed there was not a substantial likelihood the case would succeed on its merits – cannot be challenged, so if she wants to continue her quest to deny the president his right to appoint his own choice to lead the agency, she’ll have to file a new suit.

Her lawyer – Deepak Gupta, who acknowledges he’s not doing the work for free, but will not say who’s paying him – told reporters after Judge Kelly’s ruling that he would have to consult with his client. They could choose to seek a preliminary injunction, or request a ruling on a permanent injunction.

In the meantime, Ms. English’s defeat at the hands of Judge Kelly serves to draw unwanted attention to the CFPB and its supporters’ unbridled determination to maintain its unaccountability to any elected officials of any kind, an affront to our system of checks and balances.

Created as the spawn of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is perhaps the ultimate example of the Washington Swamp.

Under the law as enacted, the agency’s power is vested in a single individual, rather than a multi-member commission (such as those found at the Securities and Exchange Commission, the Federal Trade Commission, the Federal Communications Commission, and the National Labor Relations Board). Its director, appointed to a five-year term, can only be fired by the president for cause. The agency’s funding stream comes from the Federal Reserve Board, rather than an appropriation from Congress, which makes it virtually immune to congressional accountability.

A legal challenge decided by a three-judge panel of the D.C. Circuit Court of Appeals in October 2016 resulted in a ruling empowering the president to remove the CFPB’s director at will, bringing the organization under at least some measure of accountability to an elected official ultimately responsible to the voters.

The CFPB, naturally, appealed the ruling to the full court of appeals, which heard arguments in the case in late May.

We’re still waiting for a ruling. And while we wait, the ruling of the three-judge panel is on hold.

Meanwhile, the CFPB’s Federal Reserve funding stream still allows it to thumb its nose at congressional attempts at oversight.

Now that former CFPB Director Richard Cordray has resigned his position – the event that triggered this silly lawsuit by Leandra English – President Trump is said to be considering new nominees for the director position.

While he takes his time weighing his options, he should take advantage of Judge Kelly’s ruling establishing his right to appoint OMB Director Mick Mulvaney as the acting director of the agency and direct Mr. Mulvaney to fire Ms. English for insubordination.


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