Trump Wins Another Court Round in Battle Over Leadership at Consumer Bureau

President Trump’s decision to place his budget director atop the Consumer Financial Protection Bureau continues to pay off for his deregulatory agenda, as a district court on Wednesday ruled against a legal challenge by the bureau’s competing would-be director, Leandra English.

Judge Timothy Kelly of the U.S. District Court for the District of Columbia, following a similar ruling in November, rejected English’s request for a temporary restraining order that would prevent Office of Management and Budget Director Mick Mulvaney from continuing his dual-hatted role running the bureau that he and many other Republicans have long criticized.

English, an Obama-era CFPB official placed in the job in November when long-time director Richard Cordray resigned to run for Ohio’s governorship, is challenging Mulvaney’s appointment by claiming that the 2010 Dodd-Frank Financial Reform Act outlined a different succession plan. The Trump legal team cited the president’s authority under the 1998 Federal Vacancies Reform Act in defending Mulvaney’s appointment.

“English’s theory of harm—loss of her ‘statutory right to function’—fails to establish that she will suffer irreparable injury absent injunctive relief,” the judge wrote. “Because she does not face irreparable injury, English cannot, of course, show that the ‘competing claims of injury’ tip in her favor.” Mulvaney, Kelly continued, “would claim precisely the same harm…So even in that case, because the Court has determined that English is not likely to succeed on the merits, the balance of the equities would necessarily weigh against granting her an injunction.”

White House spokesman Raj Shah told news organizations, “The administration is glad to see the courts once again recognize the president’s lawful designation. The president looks forward to acting Director Mulvaney’s continued work on behalf of American consumers.”

English’s attorney, Deepak Gupta, did not commit to whether she would appeal. ​”The law is clear: President Trump may not circumvent the Senate confirmation process by installing his White House budget director to run th​e CFPB part-time,” he said. “Mr. Mulvaney’s appointment undermines the bureau’s independence and threatens its mission to protect American consumers.”

The case is likely, however, to continue to raise unresolved questions about the Vacancies Act, according to Morton Rosenberg, a longtime legal analyst now retired from the Congressional Research Service. "I assume there will be a quick appeal to a more friendly and perspicacious panel,” he told Government Executive. He pointed to the Vacancy Act’s “exception for subsequent statutes that expressly provide for a different succession and the clear direction of CFPB's enabling legislation to that effect.”

Other cases, Rosenberg continued—most importantly the Supreme Court’s recent ruling in NLRB v. SW General—emphasize that the Vacancies Act is designed to prevent the president from ignoring the Senate’s advice and consent power, meaning that Trump’s best path for altering the consumer bureau’s course is to nominate a permanent director who wins Senate confirmation.

Meanwhile, he added, “CFPB's death knell was signaled when Cordray's resignation and designation of English was countered by Trump's counter designation of OMB Director Mulvaney. The dismantling of the agency literally started that first day.”