The CFPB has issued its Spring 2018 Semi-Annual Report to Congress covering the period October 1, 2017 through March 31, 2018.

At 41 pages, the new report is even shorter than the Bureau’s last semi-annual report (which was 55 pages) and continues what appears to be a goal under Acting Director Mulvaney’s leadership of issuing semi-annual reports that are substantially shorter than those issued under the leadership of former Director Cordray.  Like the prior semi-annual report under Mr. Mulvaney’s leadership, and also in contrast to the reports issued under former Director Cordray’s leadership, the new report does not contain any aggregate numbers for how much consumers obtained in consumer relief and how much was assessed in civil money penalties in supervisory and enforcement actions during the period covered by the report.

Pursuant to Section 1017(a)(1) of the Dodd-Frank Act, subject to the Act’s funding cap, the Fed is required to transfer to the CFPB on a quarterly basis “the amount determined by the [CFPB] Director to be reasonably necessary to carry out the authorities of the Bureau under Federal consumer financial law, taking into account such other sums made available to the Bureau from the preceding year (or quarter of such year.)”  The new report references the January 2018 letter sent by Mr. Mulvaney to former Fed Chair Yellen requesting no funds for the second quarter of Fiscal Year 2018.

Mr. Mulvaney has, however, sent letters to Fed Chair Powell requesting funds transfers for the third and fourth quarters of FY 2018 and for the first quarter of FY 2019.  The amounts requested are, respectively, $98.5 million, $65.7 million, and $172.9 million.  (In contrast, former Director Cordray’s final transfer request, which was for the first quarter of FY 2018, sought a transfer of $217.1 million.)  Two of Mr. Mulvaney’s letters included the following statement:

By design, this funding mechanism [created by Section 1017(a)(1)] denies the American people their rightful control over how the Bureau spends their money, which undermines the Bureau’s legitimacy.  The Bureau should be funded through Congressional appropriations.  However, I am bound to execute the law as written. 

The new report indicates that the Bureau had 1,671 employees as of March 31, 2018, representing a slight increase in the number of employees (1,627) as of March 31, 2017.  The new report does not discuss any ongoing or past developments of significance beyond those we have covered in previous blog posts.





The CFPB’s newly-released strategic plan for fiscal years 2018-2022 reflects the restrained approach to the CFPB’s exercise of its authority previously outlined by Mick Mulvaney, President Trump’s designee as CFPB Acting Director.

In his message introducing the strategic plan, Mr. Mulvaney stated:

If there is one way to summarize the strategic changes occurring at the Bureau, it is this: we have committed to fulfill the Bureau’s statutory responsibilities, but go no further.  Indeed, this should be an ironclad promise for any federal agency; pushing the envelope in pursuit of other objectives ignores the will of the American people…[and] also risks trampling upon the liberties of our citizens, or interfering with the sovereignty or autonomy of the states or Indian tribes.  I have resolved that this will not happen at the Bureau.”

Perhaps a visible indicator of Mr. Mulvaney’s restrained approach is the length of the final strategic plan as contrasted with the CFPB’s draft strategic plan issued for comment in October 2017.  While the draft plan was 34 pages long, the final plan consists of 15 pages.

More significantly, the differences between Mr. Mulvaney’s views on how the CFPB should exercise its authorities and the views of former CFPB Director Cordray are reflected in the final plan’s description of the CFPB’s goals, objectives, and strategies.  Both plans list the five purposes for which the CFPB is authorized to exercise its authorities as set forth in Section 1021 of Dodd-Frank.  However, unlike Mr. Cordray’s draft plan which described the CFPB’s goals and objectives more expansively than the purposes listed in Section 1021, Mr. Mulvaney’s final plan closely tracks the five purposes in two of the plan’s three strategic goals and five of its strategic objectives.

Other differences include:

  • Emphasis on reducing regulatory burden.  To attain the CFPB’s first goal of “ensur[ing] that all consumers have access to markets for consumer financial products and services,” one of the CFPB’s primary objectives is to “regularly identify and address outdated, unnecessary, or unduly burdensome regulations in order to reduce unwarranted regulatory burdens.”  While the identification of such regulations was included the draft plan’s list of how Dodd-Frank authorizes the CFPB to exercise its authorities, it was not one of the draft plan’s objectives.
  • Emphasis on increased transparency in rulemaking and cost-benefit analysis. Another of the CFPB’s primary objectives for attaining its first goal is to “ensure that markets for consumer financial services and products operate transparently and efficiently.”  Among the CFPB’s strategies for achieving that objective is to “pursue an efficient, transparent, and inclusive approach to developing or revising regulations” and “carefully evaluate the potential benefits and costs of contemplated regulations.”  The draft plan called for “an efficient and evidence-based approach to developing new regulations and evaluating and revising existing regulations.”  While the draft plan noted by way of background that the CFPB assesses the costs and benefits of potential or existing regulations, it did not include conducting cost-benefit analyses among the CFPB’s strategies for achieving its objectives.
  • In what might be read as veiled criticism of the CFPB’s approach under former Director Cordray, the CFPB’s objectives and strategies in the final plan for attaining its third goal of “fostering operational excellence” include “safeguard[ing] the Bureau’s information and systems” and “align[ing] resources to mission and promote budget discipline.”  In addition, in describing how the CFPB will achieve its mission and vision, the plan states that the CFPB will act “with humility and moderation.”

The CFPB’s strategic plan is required by the Government Performance and Results Act of 1993 (GPRA) and the GPRA Modernization Act of 2010.  These laws require every federal agency to issue a new strategic plan by the first Monday in February following the year in which the term of the President commences.  Accordingly, since President Trump’s term began in January 2017, the CFPB was required to issue its new strategic plan by February 5, 2018.  In a blog post yesterday, Professor Jeff Sovern suggested that, in light of his “temporary” status, it is “weird” that Mr. Mulvaney has created a strategic plan.  As Acting Director, Mr. Mulvaney was fulfilling the CFPB’s statutory duty by issuing a final new strategic plan.

Professor Sovern also suggested that it was improper for Mr. Mulvaney to replace former Director Cordray’s strategic plan.  (Presumably, the plan that Professor Sovern thinks Mr. Mulvaney improperly replaced is Mr. Corday’s draft plan rather than his FY 2013-2017 plan.)  An OMB circular that provides guidance to federal agencies on strategic planning states that a strategic plan should reflect “Administration priorities or other emerging factors.”  Thus, it is entirely appropriate for the strategic plan issued by Mr. Mulvaney to reflect the priorities of the Trump Administration rather than those of the Obama Administration (as were reflected in Mr. Cordray’s plan).

Finally, it should be noted that Mr. Mulvaney’s plan provides no specifics about existing or potential future regulations or enforcement or supervisory initiatives.



On December 22, 2017, the U.S. District Court for the District of Columbia held oral arguments on Leandra English’s preliminary injunction motion through which she seeks to block Mick Mulvaney from continuing to serve as the Acting Director of the CFPB. Judge Timothy Kelly presided over the hearing. Deepak Gupta argued for English. Acting Assistant Attorney General for the Justice Department’s Civil Division, Chad Readler argued for the Department of Justice.

At the beginning of the hearing, Judge Kelly announced that he had a list of questions for each side. He then used his questions to guide the hearing, giving each side an opportunity to answer before moving to his next question.

His questions generally cut straight to the heart of English’s and Mulvaney’s arguments, which we have discussed at length. The questions likely reflect his view on the decisive issues in the case. Judge Kelly bookended the hearing with questions about whether a preliminary injunction would throw the already embattled agency into chaos.

For example, his second question was whether and how a preliminary injunction would upset the status quo at the CFPB. He observed that injunctions exist to preserve the status quo while a case is litigated. Then he asked whether unseating Mulvaney would preserve the status quo given that Mulvaney is already leading the agency.

Gupta argued that, for reasons of equity, the status quo must be measured from the last “uncontested” state of affairs. Otherwise, Gupta argued, the court would reward usurpers. The last uncontested state of affairs as Gupta saw it was at midnight when English automatically became the Acting Director after Cordray’s resignation took effect.

The DOJ countered that English’s argument ignores some key facts, however. While English’s appointment took effect at midnight (according to her), Mulvaney’s appointment took effect a minute later at 12:01 am. That one-minute difference cannot reasonably be the deciding factor as to what counts as the status quo. This is especially so when the CFPB’s own general counsel stated that a Trump-appointed Acting Director would have a more legitimate claim to the office than English. Readler punctuated this argument by pointing-out that CFPB attorneys were seated with him at counsel table, not with English’s attorneys.

Towards the end of the hearing, when discussing the “balance of the equities” prong of the preliminary injunction analysis, Judge Kelly asked how a preliminary injunction would contribute to “clarity” about who was rightfully in charge of the CFPB. In response, Gupta generally repeated the status quo arguments he started-off with. Readler reminded the court that a preliminary injunction could result in the temporary appointment of a third leader of the agency in less than one month.

In the middle of the hearing, Judge Kelly’s questions touched on other significant weaknesses in English’s case. For example, English argues that language in Dodd-Frank allowing the CFPB Director to name a Deputy Director who “shall serve” as Acting Director is more specific than the Vacancies Reform Act (“VRA”) which allows the President to appoint acting officials. Thus, relying on the maxim of statutory construction that specific statutes trump general ones (i.e., the “general-specific” maxim), she argues that Dodd-Frank governs the appointment of the Acting CFPB Director. Through his questions, Judge Kelly highlighted that the “general-specific” maxim cannot be applied unless the VRA and Dodd-Frank are irreconcilable. The DOJ was quick to seize on the judge’s questions and point out that Dodd-Frank and the VRA are easily harmonized.

During the course of the argument, Gupta also confirmed that English takes the position that the Acting CFPB Director is removable only for cause just as the CFPB Director would be. Several amici have pointed-out the absurd results this creates, including the Credit Union National Association, which submitted an amicus brief drafted by Ballard Spahr. Judge Kelly followed-up by asking whether English’s removal-only-for-cause argument means that an unelected official can serve without Senate confirmation in the executive branch in opposition to the President. Gupta pointed to the Federal Housing Finance Agency (“FHFA”), which he said has analogous succession provisions. The DOJ responded: even if that were so, FHFA does not have nearly the power that the CFPB has wielded since its inception.

Also worth noting is the difficulty that English’s side had substantiating the irreparable harm element of her preliminary injunction claim. The DOJ argued that this was a run-of-the-mill employment case, in which irreparable harm is almost never found. Apparently rejecting that label, Judge Kelly nevertheless asked whether English could show any irreparable harm to herself that would flow from Mulvaney’ serving as Acting CFPB Director.

Gupta argued that English would be harmed by being deprived of the ability to exercise the powers of office. In doing so, he relied on a single district court case indicating that such harm could, indeed, be irreparable. Readler reminded the court that the case has never before been cited or relied upon by any court. He also distinguished the case and encouraged Judge Kelly to ignore it, saying that practically every case involving government employment involves some deprivation of the ability to exercise the powers of an office. If English were right, courts would have found irreparable harm in all of the run-of-the-mill employment cases, which they haven’t.

Judge Kelly wrapped-up the two-hour hearing by giving both sides an opportunity to raise any points not covered. He did not issue a decision or indicate when one could be expected. Based on the Judge’s denial of English’s request for a temporary restraining order and his questions and observations at the hearing, it seems likely that he will deny her preliminary injunction motion as well. English will likely appeal any such denial to the D.C. Circuit. 

On December 12, the Credit Union National Association (“CUNA”) filed an amicus brief in D.C. Federal District Court opposing Leandra English’s motion for a preliminary injunction to block President Trump’s appointee for Acting CFPB Director, Mick Mulvaney, from exercising the powers of that office. The Court has already denied English’s motion for a temporary restraining order.

CUNA is the largest organization representing the nation’s 6,000 credit unions, which are heavily regulated by the CFPB. As such, it has a significant interest in the outcome of preliminary injunction hearing.

In its brief, CUNA argues that Mulvaney’s appointment was entirely proper under the Vacancies Reform Act of 1998 (“VRA”). CUNA further argues that the language in Dodd-Frank stating that the Deputy Director shall become the Acting Director in the “absence or on availability” of the Director covers temporary situations, like an accident requiring long term hospitalization of the Director. It does not cover a vacancy in the office of the Director, including one resulting from a resignation.

Under the VRA, when an office is vacant, the President has the power to appoint an acting officer to fill the post, subject to certain limitations. Indeed, when the VRA was passed, the Senate committee that considered the VRA explicitly stated that, “statutes enacted in the future purporting to or argued to be construed to govern the temporary filling of offices covered by this statute are not to be effective unless they expressly provide that they are superseding the Vacancies Reform Act.” So, because Dodd-Frank did not explicitly override the VRA, the VRA governs.

In addition, CUNA points out the serious constitutional problems that would result if the court adopted English’s position. If she is right, then a departing CFPB Director would have the power to appoint anyone as his or her successor, including non-citizens, through the simple expedient of naming him or her as the Deputy Director, while the President would have more limited powers of appointment under the VRA. That would give the CFPB Director more power than the President over an agency in the executive branch of government.

What’s more, English’s argument also implies that the President would be as unable to remove an Acting CFPB Director as he is the CFPB Director. That only exacerbates the constitutional defects that are at the heart of the PHH case, which we have blogged about extensively.

CUNA’s brief, which Ballard Spahr authored, highlights the industry perspective on why Leandra English is wrong and why the court should not try to unwind the President’s appointment of an Acting CFPB Director. We will continue to follow this unfolding saga closely.

We have previously blogged about reports that Mick Mulvaney, President Trump’s designee as CFPB Acting Director, has put a 30-day freeze on all regulatory action, CFPB hiring, and new enforcement cases.  We also blogged about the CFPB’s withdrawal of its opposition to a motion filed by the defendants in an enforcement action to stay execution of a $7.9 million judgment obtained by the CFPB without posting a bond.

Mr. Mulvaney is reported to have also taken the following recent actions:

  • Placing a freeze on the CFPB’s collection of any personally identifiable information, such as individual loan level data, until the CFPB improves its data security systems.  The Office of Inspector General for the CFPB issued two reports earlier this year (which we blogged about here and here) in which it found deficiencies in the CFPB’s data security practices.
  • Approving payments out of the civil penalty fund.  (Since Mr. Mulvaney is reported to have placed a 30-day freeze on such payments, presumably the approved payments represent an exception.)
  • Directing CFPB staff to examine all investigations and litigation.  It has been reported that Mr. Mulvaney has suspended the CFPB’s investigation of a company that has challenged the CFPB’s constitutionality and authority to issue a civil investigative demand to the company pending a ruling by the federal district court hearing the company’s challenge.

It has also been reported that Mr. Mulvaney has voiced support for Congressional efforts to override the CFPB’s final payday loan rule.  We recently blogged about the introduction of a joint resolution under the Congressional Review Act to override the rule by a bipartisan group of lawmakers.

With regard to Leandra English, who was appointed CFPB Deputy Director by Richard Cordray before his resignation as CFPB Director and is challenging Mr. Mulvaney’s right to serve as Acting Director, Mr. Mulvaney is reported to have indicated that he has no plans to dismiss Ms. English but has sent her several emails either instructing her to stop holding herself out as Acting Director or asking her to perform duties that fall within her purview as Deputy Director.


As we reported, the DOJ’s Office of Legal Counsel (OLC) has issued a memorandum to the President’s Counsel in which it opined that the President has the legal right to appoint Mick Mulvaney CFPB Acting Director under the provision of the Federal Vacancies Reform Act (FVRA) that authorizes the President to temporarily fill an executive agency position requiring confirmation when the position becomes vacant because the person holding it “dies, resigns, or is otherwise unable to perform the functions and duties of the office.”  In the OLC’s opinion, the FVRA provision can be used by the President as an alternative to 12 U.S.C. § 5491(b)(5(B), the provision in the Consumer Financial Protection Act (CFPA) that provides the CFPB Deputy Director “shall serve as acting Director in the absence or unavailability of the Director.”  We believe the OLC has advanced strong arguments in support of its position.  However, we also believe that the OLC was mistaken in rejecting another argument in support of the President’s action.

As a threshold matter, the OLC addressed the coverage of 12 U.S.C. § 5491(b)(5(B), upon which Leandra English, former Director Cordray’s choice of Deputy Director (and choice of successor), relies as the basis for her claim that she has a legal entitlement to the position of Acting Director.  While the OLC acknowledged that “the question is not free from doubt,” it concluded that the statutory language “absence or unavailability” should be construed to include a vacancy resulting from a resignation.

We respectfully disagree with the OLC’s construction of the phrase “absence or unavailability of the Director.”  In our view, there are several compelling reasons why the phrase should not be construed to cover the present situation—a vacancy in the position of CFPB Director created by the Director’s resignation.

First, the plain language of the phrase suggests to us that it was not designed for vacancy appointments and was instead intended for the circumstance where the Director is temporarily absent or unavailable.  We would submit that, after former Director Cordray resigned, there was no longer any Director who could be absent or unavailable.

Additionally, as the OLC noted, providing for a vacancy appointment by referring to the “absence or unavailability” of the Director is “unusual.”  In fact, the OLC was not able to identify any statute using this formulation with respect to the appointment of an acting officer.  Rather, Congress has typically referred to vacancies in office.  For example, Congress has expressly provided that when the offices of OMB Director, FAA Administrator, or Administrator of the SBA are “vacant” or have a “vacancy,” the Deputy Director or Administrator acts as Director or Administrator.  This indicates that when Congress has wanted to give an officer holding a Deputy position the authority to run an agency in an acting capacity when the position of agency head became vacant, it has done so expressly and unambiguously.

Indeed, the term “vacancy” is used in other titles of the Dodd-Frank Act (the CFPA is Title 10), such as in connection with replacing members of the Financial Stability Oversight Counsel and the FDIC Board of Directors.  Moreover, with regard to the FDIC Board, Section 336 of the Dodd-Frank Act specifically refers to a “vacancy” in the office of CFPB Director and distinguishes that from an “absence or disability.”  (Under both circumstances the Acting CFPB Director is to be a member.)

Second, the legislative history of the CFPA provision does not, as some commentators have argued, compel the conclusion that the CFPA provision was intended to override application of the FVRA in the present situation.  The version of the CFPA that originally passed the House stated that “In the event of vacancy or during the absence of the Director (who has been confirmed by the Senate pursuant to paragraph (2)), an Acting Director shall be appointed in the manner provided in section 3345 of title 5, United States Code.”  Section 3345 of title 5 is a reference to the FVRA.  The quoted language does not appear in the CFPA as enacted, which designates the Deputy Director as Acting Director in the Director’s “absence or unavailability.”

Rather than concluding that Congress’ decision not to specifically make the FVRA applicable to the Acting Director position means Congress intended for the FVRA never to apply, one could just as easily reach the opposite conclusion.  More specifically, Congress can be assumed to have known that the FVRA applies when the head of an agency “dies, resigns, or is otherwise unable to perform the functions and duties of the office.”  Accordingly, the CFPA legislative history could readily be interpreted to mean that Congress eliminated the House version’s reference to a “vacancy” because it knew the FVRA would apply by its terms to a vacancy created when the Director “dies or resigns” or when the Director was “otherwise unable to perform the functions and duties of the office” and only wanted to create a rule of succession for when the Director was temporarily “otherwise unable to perform the functions and duties of the office.”  In other words, in using the phrase “absence or unavailability,” Congress was only making the FVRA inapplicable where the Director remained in office but was temporarily unable to carry out his leadership role.

Third, this construction of the phrase “absence or unavailability” is consistent with established rules of statutory construction.  One of those rules provide that when two federal statutes are arguably in conflict with one another, the more specific statute trumps the more general statute (no pun intended).  A second such rule provides that when two federal statutes are arguably in conflict with one another, they should be harmonized to the extent possible.  (See our prior blog post for citations to the relevant case authority.)  There is no question that the FVRA expressly covers the precise situation here – namely, a vacancy created by a resignation—while the coverage of the CFPA provision in this circumstance is, at best, ambiguous.

Fourth, a construction of the phrase “absence or unavailability” that does not cover a vacancy is also consistent with the “checks and balances” role of the Senate confirmation process.  Unlike the CFPB Director, the CFPA does not require the Deputy Director to be confirmed by the Senate.  Thus, if the CFPA provision were to cover a vacancy, it would allow someone who has not been confirmed by the Senate to lead the CFPB for an indeterminate period of time.

It bears noting that the OLC did not cite a single case on point for its expansive construction of the phrase in question.  Rather, it apparently felt constrained by positions it had taken internally in the past.  In the OLC’s defense, its position was part of an overall reading of the statutes in question—one that resulted in the correct result that the President has the power to appoint an Acting Director.  We are not arguing with the ultimate OLC conclusion here.  Instead, we are merely suggesting that there are at least two roads to this conclusion and that neither should be rejected.


Last Friday, November 24, effective at midnight, Richard Corday resigned as CFPB Director.  Earlier in the day, the CFPB issued a press release announcing that Mr. Cordray had named Leandra English, the CFPB’s Chief of Staff, the CFPB Deputy Director.

Yesterday, Ms. English filed a complaint in D.C. federal district court seeking a declaration that she is the CFPB’s Acting Director and Mick Mulvaney, President Trump’s appointee to serve as Acting Director, is not the Acting Director.  She also filed an emergency motion for a temporary restraining order to prevent President Trump and Mr. Mulvaney “from appointing, causing the appointment of, or recognizing the appointment of an Acting Director of the [CFPB] via any mechanism other than that provided for by [the Consumer Financial Protection Act.]”

On Friday afternoon, following the CFPB’s announcement of Ms. English’s appointment, the White House issued a press release announcing that President Trump had designated Mr. Mulvaney, the Director of the Office of Management and Budget, to “serve as Acting Director until a permanent director is nominated and confirmed.”  The announcement was consistent with earlier reports that President Trump intended to appoint Mr. Mulvaney to serve as Acting Director effective upon Mr. Cordray’s resignation.

On Saturday, the DOJ’s Office of Legal Counsel (OLC) issued a memorandum to the President’s Counsel in which the OLC opined that the President had the legal right to appoint Mr. Mulvaney under the provision of the Federal Vacancies Reform Act (FVRA) that authorizes the President to temporarily fill an “executive agency” position requiring confirmation with someone serving in an acting capacity when the position becomes vacant because the person holding it “dies, resigns, or is otherwise unable to perform the functions and duties of the office.”  In the OLC’s opinion, the FVRA provision can be used by the President to override the provision in the Consumer Financial Protection Act (CFPA) that provides that the Deputy Director “shall serve as Acting Director in the absence or unavailability of the Director.”  (On Saturday, the CFPB’s General Counsel issued a memorandum to the CFPB’s Senior Leadership Team in which she agreed with the OLC’s analysis of the FVRA.)

In her memorandum in support of a TRO, Ms. English argues that the President’s use of the FVRA to appoint Mr. Mulvaney as Acting Director is unlawful because it contravenes the CFPA’s “specific, mandatory plan for filling the vacancy in question.”  Ms. English’s legal position is thus based on the premise that the CFPA provision that states the Deputy Director shall serve as Acting Director in the Director’s “absence or unavailability” covers a vacancy created by the CFPB Director’s resignation.  In its opinion, the OLC stated that “while the question is not free from doubt,” it believed “unavailability” should be construed to include a vacancy resulting from a resignation.

We continue to believe that compelling arguments can be made to support the position that “absence or unavailability” does not include a vacancy resulting from the Director’s resignation and will soon be publishing another blog post discussing those arguments.


According to media reports, President Trump is expected to name Mick Mulvaney, the current Director of the Office of Management and Budget, to serve as CFPB Acting Director upon Director Cordray’s resignation.  The President’s announcement may come as soon as today.

Assuming the media reports are accurate, they indicate that the White House has decided that David Silberman, the current CFPB Acting Deputy Director, does not automatically become Acting Director upon Director Corday’s resignation pursuant to the Dodd-Frank Act provision that provides that the Deputy Director shall “serve as acting Director in the absence or unavailability of the Director.”  In our view, because that provision does not cover the present situation (i.e., a vacancy created by the existing Director’s resignation and permanent departure from the agency), the Federal Vacancies Reform Act of 1998 permits President Trump to appoint as Acting Director either a senior employee of the CFPB or an officer of an agency who has already been approved by the Senate such as Mr. Mulvaney.

According to widespread media reports, Director Cordray informed CFPB staff members today that he expects to resign as CFPB Director by the end of this month.  His replacement with a successor appointed by President Trump will undoubtedly have a significant impact on the agency’s priorities and initiatives.  On December 5, 2017, from 12 p.m. to 1 p.m. ET, Ballard attorneys will hold a webinar: “Richard Cordray Resigns: What’s Next for the CFPB?”  Click here to register.

Director Cordray is reported to have told CFPB staff that “it has been a joy of my life to have the opportunity to serve our country as the first director of the Consumer Bureau by working alongside all of you here.  Together we have made a real and lasting difference that has improved people’s lives.”

The immediate question raised by Director Corday’s announcement is who will serve as Acting Director pending the appointment and confirmation of a successor.  David Silberman currently serves as Acting Deputy Director.  The Dodd-Frank Act provides that the Deputy Director shall “serve as acting Director in the absence or unavailability of the Director.”

This provision raises two questions.  First, since Mr. Silberman is Acting Deputy Director, it is unclear whether he is eligible to serve as Acting Director under this provision.  (Director Cordray could seek to remove this issue by appointing Mr. Silberman the Deputy Director before he leaves the CFPB.)

Second, there is uncertainty as to whether the phrase “absence or unavailability of the Director” covers the present situation (i.e., a vacancy created by the existing Director’s resignation and permanent departure from the agency).  As a result, the White House could take the position that because Dodd-Frank does not specify who should serve as Acting Director upon the Director’s resignation, the Federal Vacancies Reform Act of 1998 permits President Trump to appoint as Acting Director either a senior employee of the CFPB or an officer of an agency who has already been approved by the Senate.  In that circumstance, Treasury Secretary Mnuchin would seem to be the likely choice to serve as Acting Director until Director Cordray’s successor is appointed and confirmed.

According to Politico, the White House has released a written statement indicating that President Trump plans to appoint an Acting Director.  However, the statement did not indicate the basis for the White House’s position.  Should President Trump appoint an Acting Director, that appointment might face a challenge from supporters of Mr. Silberman.