Given the speculation that Director Cordray will soon resign to run for Ohio governor, we have been pondering whether President Trump could appoint an Acting Director upon his resignation or whether David Silberman, the Acting Deputy Director, would automatically become Acting Director.
Our analysis indicates that under the Federal Vacancies Reform Act of 1998 (Vacancies Act) President Trump could appoint an Acting Director should Director Cordray resign. The Vacancies Act provides that when an “executive agency” position requiring confirmation becomes vacant because the person holding the position “dies, resigns, or is otherwise unable to perform the functions and duties of the office,” it may be filled temporarily by someone serving in an acting capacity in one of three ways. The first way is for the “first assistant” to such a position to assume the functions and duties of the office. However, the President has the option of using one of two other ways. The President can (1) direct an officer in any agency who is occupying a position requiring Senate confirmation to perform the functions and duties of the office, or (2) select any officer or employee of the subject agency who is occupying a position for which the rate of pay is equal to or greater than the minimum rate of pay at the GS-15 level and who has been with the agency for at least 90 of the preceding 365 days to perform the functions and duties of the office.
The Vacancies Act provides that its three ways are “the exclusive means” for filing a vacancy unless Congress has expressly provided by statute who should “perform the functions and duties of a specified office temporarily in an acting capacity” when a vacancy occurs or the President fills the vacancy through a recess appointment. In general, the Vacancies Act permits a temporary appointment to continue for up to 210 days after the vacancy is created, with the time suspended when a nomination has been submitted to the Senate and confirmation is pending.
The Dodd-Frank Act provides that the CFPB “shall be considered an Executive agency, as defined in section 105 of title 5, United States Code.” (Section 105 provides that “[f]or the purpose of this title, “Executive agency” means an Executive department, a Government corporation, and an independent establishment.) Accordingly, unless Congress expressly provided in Dodd-Frank for how a vacancy in the position of CFPB Director should be filled, the Vacancies Act’s three permissible ways for filling a vacancy would apply in the absence of a recess appointment.
It appears Congress did not expressly provide in Dodd-Frank for how a vacancy should be filled if the CFPB Director were to resign. Dodd-Frank provides only that the Deputy Director “shall serve as acting Director in the absence or unavailability of the Director.” It does not expressly authorize the Deputy Director to serve as Acting Director when a vacancy in the position of Director is created. As a result, a vacancy can only be filled using one of the Vacancies Act’s three permissible methods.
Since President Trump would have the option of making his own appointment instead of allowing Mr. Silberman to serve as the Acting CFPB Director, it can be assumed he would make his own appointment. In addition, it can be assumed the President would appoint someone to serve as Acting Director whom he has already appointed to another position requiring Senate confirmation rather than appoint another current CFPB employee.
Treasury Secretary Mnuchin would be the obvious and logical person to serve as Acting Director. It should be noted that the Dodd-Frank Act authorized the Treasury Secretary “to perform the functions of the Bureau under this subtitle until the Director of the Bureau is confirmed by the Senate.” The fact that Congress considered the Treasury Secretary to be the appropriate person to run the CFPB until a Director was confirmed provides strong support for Secretary Mnuchin’s appointment to serve as Acting Director.
Given that Director Cordray’s resignation could be imminent, we hope that President Trump promptly selects his appointee for Acting Director so that he or she can be in place immediately upon Director Cordray’s departure.