English v. Mulvaney & Trump: Some Reasons Why It Matters

by Jeff Sovern

A couple of people have suggested to me that it doesn't really matter who wins as between English and Mulvaney because Trump will still get to nominate a new director for a five-year term.  I think that's wrong for several reasons.

First, the obvious: the process of nomination and confirmation is not instantaneous, and so during the interval between those two events, the CFPB will continue to make decisions. Consumers will be better off if a consumer advocate makes them.

Second, as others have observed, the CFPB is supposed to be independent of the president. Mulvaney reports to the president in his role as head of OMB, and so the CFPB's independence is compromised.  Some have also pointed out that the CFPB director sits on other governmental panels which are also supposed to be independent of the president. Presidents can direct agencies within their control to pursue political goals at the expense of the public interest. At least theoretically (and I hope in practice), independent agencies are free to exercise judgment uninfluenced by political goals. To take one extreme example, they can penalize banks without concern that doing so will cost them political contributions. 

Third, the resolution of this dispute will affect the incentives the president faces in appointing a new director.  If English wins, Trump will presumably want to appoint a new director quickly to get one of his people at the CFPB.  If Mulvaney wins, that incentive disappears. In fact, Trump might prefer to delay appointing a new director because he will lose the direct control he can exercise over the Bureau once a new director is confirmed.   Put another way, one argument for ruling for English is that doing so will encourage the president to nominate a candidate  sooner rather than later so that the Bureau is run by someone approved by the Senate in accordance with the statutory scheme Congress established, rather than by an interim leader.

The president is entitled to name a new director as long as the Senate concurs in his choice.  Appointing Mulvaney gives the president control over the supposedly-independent CFPB for an extended period without any senatorial review.  That is not what Congress wanted when it enacted the Dodd-Frank Act. And that's a problem.