CFPB Leadership Dispute: Impacts and Next Steps – An Update

From: Lexology

Max BoniciKevin Petrasic and Benjamin Saul | White & Case LLP

On January 10, 2018, a federal judge denied Consumer Financial Protection Bureau (CFPB or Bureau) Deputy Director Leandra English’s motion for a preliminary injunction to prevent (1) Mick Mulvaney from serving as CFPB Acting Director and (2) President Trump from nominating another to fill that role temporarily under the Federal Vacancies Reform Act (Vacancies Act). On January 12, English filed a notice of appeal to the DC Circuit Court of Appeals (DC Circuit). This decision, which follows Judge Kelly’s November 2017 denial of a temporary restraining order (TRO) on similar grounds, preserves Mulvaney’s Acting Directorship, pending review by the DC Circuit. While English’s appeal plays out in court, Judge Kelly’s order maintains the apparent status quo at the Bureau and reinforces Mulvaney’s authority, including current reform efforts at the Bureau focused on—among other things—the review of pending rulemakings, investigations, and key policy issues.

Background

As discussed in our last alert, CFPB Leadership Dispute: Impacts and Next Steps, on November 28, 2017, DC District Court Judge Timothy Kelly denied English’s request for a TRO to prevent Mulvaney from serving as Acting Director and President Trump from nominating another Acting Director under the Vacancies Act.1 On December 6, 2017, English requested a preliminary injunction on similar grounds and sought a declaration that she, rather than Mulvaney, is the rightful CFPB Acting Director under Section 1011 of the Dodd-Frank Act (Section 1011) until President Trump nominates, and the Senate confirms, a new Director.2 Judge Kelly’s January 10, 2018, ruling follows substantial briefing and oral arguments from both sides as well as interested third parties, and preserves Mulvaney’s Acting Directorship pending review by the DC Circuit.3 On January 12, English filed a notice of appeal seeking expedited appellate review of the January 10 decision.4 In addition, a parallel lawsuit has been filed on similar grounds.5

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