Trump-Appointed Judge Overseeing Legal Challenge To CFPB Replacement

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Robert Donachie Capitol Hill and Health Care Reporter
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A federal judge appointed by President Donald Trump is charged with overseeing a lawsuit challenging Trump’s authority to appoint a replacement for Richard Cordray at the Consumer Financial Protection Bureau (CFPB).

U.S. District Judge for the District Court of District of Columbia Timothy J. Kelly, a Trump nominee confirmed in the Senate in September, has been assigned a lawsuit challenging the president’s authority to appoint an interim director of the CFPB in the absence of former agency Director Richard Cordray.

Cordray chose his former chief of staff, Leandra English, as his replacement, but President Donald Trump, whom the Department of Justice believes has ultimate authority in the matter, named Mulvaney as the temporary head of the CFPB Friday evening. The dueling appointments have sparked a number of questions as to who is running the agency and a legal challenge of Trump’s authority.

English filed suit against Trump and Mulvaney late Sunday to secure control of the agency, claiming she has the legal right to succeed Cordray as the interim director.

The White House is adamant that it has the authority to replace Cordray, but the legal reading of the 2010 Dodd Frank regulatory legislation leaves the succession rather open to interpretation.

Dodd Frank says that the deputy director shall “serve as acting director in the absence or unavailability of the director.”

Some legal scholars argue that the word “unavailability” could mean a wide range of things. It could be interpreted as a leave of absence for the director’s health, rather than an instance where the director retires, as is the case with Cordray. Others believe that the law gives the power to Trump to decide a new director

The Justice Department released a memorandum Saturday that English, as deputy director under Cordray, “may serve as Acting Director,” federal law “does not displace the President’s authority under the Vacancies Reform Act.”

“Even when the Vacancies Reform Act is not the ‘exclusive’ means for filling a vacancy, the statute remains an available option, and the President may rely upon it in designating an acting official in a manner that differs from the order of succession otherwise provided by an office-specific statute,” the DOJ memorandum read. “The President therefore may designate an Acting Director of the CFPB under the Vacancies Reform Act.”

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