How The Dodd-Frank Act Plays Into The CFPB Succession Debate As the showdown over the leadership of the Consumer Financial Protection Bureau continues, NPR's Robert Siegel talks with Georgetown University law professor Adam Levitin about what the law says about the succession of bureau directors.

How The Dodd-Frank Act Plays Into The CFPB Succession Debate

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How is it that the method of replacing the director of the Consumer Financial Protection Bureau is even in dispute? Well, Georgetown Law professor Adam Levitin says Leandra English is the rightful acting director thanks to the language and legislative history of the Dodd-Frank Act. And Adam Levitin joins us now. Welcome to the program.

ADAM LEVITIN: Good afternoon.

SIEGEL: Take us back to the year 2010 when the Dodd-Frank Act wasn't yet law but versions of it had been approved by both houses of Congress both controlled by Democrats at the time. You point out that the House version in fact did apply, the very federal law that the Trump administration has invoked - Senate bill didn't. What happened?

LEVITIN: Well, the House - as you said, the House bill said that this law called the Federal Vacancies Act would control the succession for the CFPB directorship. The Senate bill had different language. The Senate bill said that upon the absence or unavailability of the director, the deputy director shall - emphasis on that word shall - become the acting director.

These two bills went into conference committee, and we don't know exactly what happened in that sealed room. There was the white smoke and the black smoke. And when it emerged, we had the Senate language being adopted. And that itself is I think a good indication that Congress decided not to apply the Vacancies Act to the Consumer Financial Protection Bureau.

SIEGEL: So first of all, I should ask. I mean, was it clearly intentional that the Senate language was used, or was this just in all of the chaos of writing a big piece of legislation?

LEVITIN: We can't say for sure, but certainly that was the language that they chose. And I think that one can make - can learn something by seeing what they chose to reject in this case.

SIEGEL: What would be the logic of doing that? It couldn't have been the intent of the law to say that if the director leaves after a year, he's the one who gets to pick to run the bureau.

LEVITIN: Well, actually that's the default setting actually also under the Vacancies Act. Under the Vacancies Act, the default setting is that the deputy director of an agency steps in as the acting director unless the president does something else. So that itself is not a change.

What I think Congress was trying to do here was - Congress wanted to force the president to have to send someone up through the nomination process. So the issue in this case is not whether Leandra English can remain indefinitely as the acting director of the CFPB. The president can follow the Constitution and nominate someone to be the director of the CFPB. And that person - if they're approved by the Senate, if they're confirmed the Senate - will be the director of the CFPB, and that ends the situation.

The problem here is that Donald Trump wants to game the system. He doesn't want to have to send someone up through Senate confirmation. And instead. He'd rather have Mick Mulvaney serve simultaneously as OMB director and CFPB director and do that presumably almost indefinitely, probably until the last minute, then nominate someone who would have five years as director running from that date.

SIEGEL: The president has a Justice Department memo saying he has the right to pick the acting director. The general counsel for the bureau itself wrote that it's her legal opinion - and I'm quoting - "that the president possesses the authority to designate an acting director for the bureau." Is it at least arguable, or are they missing something here?

LEVITIN: I think they are missing something. I think, though, that there is a legal argument here. And this is already in court and will have to be resolved by the courts. Their argument is not that the Vacancies Act applies rather than the Dodd-Frank Act. Instead, they argue that the Vacancies Act exists as an alternative to the Dodd-Frank Act and that the president can pick and choose between these two statutes.

SIEGEL: I read a distinction that was drawn in the Justice Department memo supporting the president's position, which was that those typically exempted bodies are, say, commissions or boards in which there are a number of confirmed nominees, which makes a certain amount of sense. If one of them is not there, then all the others have already been confirmed. They would act up. This isn't the case with this job. Is this one of a kind, being director of this bureau?

LEVITIN: Yes, it is. The CFPB has a different structure than other agencies in the federal government. And that was a very deliberate move by Congress. Congress saw that the existing federal financial regulators, the bank regulators, failed to do their job to protect consumers from abuses in the financial sector that led up to the 2008 financial crisis. Congress saw that and decided that it needed to do something different. It needed to have a different kind of structure that would be less susceptible to political influence by the banks and that would be more responsive to consumers. And that was why this particular structure was created.

SIEGEL: Back to this this dispute today of the two claimants to being the acting director of the bureau, is there any precedent for it that would guide the courts in settling this?

LEVITIN: Oh, I think one has to either look back to, you know, disputes about the pope and the anti-pope or maybe go to "Game Of Thrones" - that in modern American history, there's nothing like this.

SIEGEL: Adam Levitin, professor of law at Georgetown University, thanks for talking with us.

LEVITIN: It's been a pleasure.

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