White House says Trump authority is supreme in agency fight

Senior White House officials insisted Saturday that President Trump is legally allowed to appoint an acting director for the Consumer Financial Protection Bureau (CFPB), which is an independent agency.

Officials say Trump has the right to supersede an appointment by the exiting director.

The officials called Trump’s appointment of Office of Management and Budget Director Mick Mulvaney to lead the CFPB “a typical, routine move” in line with years of precedent.

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Trump appointed Mulvaney on Friday night to serve as acting director of the CFPB, hours before former Director Richard Cordray left the agency. Cordray promoted his chief of staff Leandra English to the deputy director position before leaving.

The conflicting appointments mean there are two people who can claim to be the acting director of one federal agency.

The Dodd-Frank Act of 2010, which established the CFPB, calls on the agency’s deputy director to serve as acting director until the president appoints and the Senate confirms a permanent replacement.

But senior administration officials said Saturday that the Federal Vacancies Act of 1998 empowers Trump to override the CFPB’s line of succession with his own pick. The officials spoke to reporters during a Saturday call under the condition of anonymity.

The Vacancies Act allows the president to appoint any Senate-confirmed officer as the acting director or secretary of a federal agency or department.

Legal experts say it’s unclear whether English or Mulvaney is the rightful director of the CFPB, but senior administration officials said years of precedent supported Trump’s decision.

One senior administration official said the CFPB’s line of succession “continues to be available as a default,” but that “the Vacancies Act is also there as a way that the president can supersede the way those agency statutes work.”

“The common objections that you hear in these various blog posts online is that ‘Oh, the CFPB statue said the CFPB deputy director shall serve as the director,’ ” said the official. “That’s clear in lots of these statues that the Vacancies Act trumps.”

The official said the White House consulted with the Office of Legal Counsel before nominating Mulvaney, and the office will likely release a brief supporting Trump’s move within the day.

The official also said the White House doesn’t expect any legal issues with Mulvaney’s appointment, and didn’t expect it to derail the agency’s work.

“I know it makes it a better story if things are unpleasant and there’s a clash of two directors, but I don’t think it’s [at] all clear that’s going to happen,” the official said. “I think there’s a very good chance that Director Mulvaney will come in on Monday morning and that will be end of things.”

Even so, the official accused Cordray of starting a legal battle “we’ve gone out of our way to avoid.”

Despite the White House’ assurances, the dueling appointments have triggered widespread confusion among experts and concern among the CFPB’s regulated industries. Several groups aligned with Cordray’s CFPB have insisted that Mulvaney step aside, while Trump’s supporters have defended the president.

English, a senior CFPB employee, would likely continue the agency’s aggressive enforcement actions and sweeping lending rules. Mulvaney, a staunch conservative who once called the CFPB “a sick, sad joke” would likely freeze or significantly change the agency’s current agenda.

Mulvaney will also have to balance overseeing the CFPB while working with lawmakers to fund the government and raise the debt ceiling before the end of 2017. Failing to do so could risk a government shutdown or the United States defaulting on its debt.

The other administration official expressed no concerns that Mulvaney’s role at CFPB would detract from his responsibilities as OMB director. The official said Trump picked Mulvaney because of his work in Congress on the House Financial Services Committee, his budget experience and previous Senate confirmation.