Originally posted at Notice & Comment, a blog of the Yale Journal on Regulation and the American Bar Association Section of Administrative Law & Regulatory Practice. Reprinted with permission.
On Friday, November 24, Consumer Financial Protection Bureau Director Richard Cordray named Leandra English, the longtime CFPB Chief of Staff, to the post of Deputy Director. Based on legislation specific to the CFPB, that put her in a position to serve as Acting Director upon his departure. Cordray then resigned. A few hours after Cordray resigned, the White House announced that President Trump had selected OMB Director Mick Mulvaney to serve as CFPB Acting Director, invoking the President’s powers under the more general Federal Vacancies Reform Act. Unfortunately, President Trump’s actions may result in needless—and illegal—chaos at the CFPB. The President surely retains the power to choose the next CFPB Director, but only by nominating a candidate that the Senate confirms.
Under the 2010 Dodd-Frank legislation, which authorized the creation of the CFPB, the Deputy Director is to serve as Acting Director in the absence of a director. Dodd-Frank’s statutory language is specific and mandatory. The Deputy Director—presently Leandra English—“shall serve as acting Director in the absence or unavailability of the Director.” 12 USC 5491(b)(5). But the Office of Legal Counsel has suggested that a more general statute, the Federal Vacancies Reform Act of 1998, also applies. That statute authorizes the “first assistant” to the office to act (also Deputy Director Leandra English, in this case), 5 U.S.C. 3345(a)(1), but “notwithstanding” that provision also authorizes the President to select as an acting official a Senate-confirmed official serving elsewhere in the government (in this case, OMB Director Mulvaney). 5 U.S.C. 3345(a)(2).
We are deep in the administrative law thickets here, and these issues have been explored to some extent elsewhere, including by Marty Lederman here and multiple posts by Adam Levitin here. In this post, I’ll try to add a greater focus on whether 12 U.S.C. 5491(b), the Dodd-Frank provision, authorizes the Deputy Director to serve as Acting Director following Cordray’s resignation. I’ll then turn to the issue that has become the centrally disputed one—whether the FVRA provides the President with an alternative mechanism for selecting an Acting Director.
On the first issue, the Office of Legal Counsel has taken the position that 12 U.S.C. 5491(b)(5) indeed authorizes Deputy Director Leandra English to serve as Acting Director. OLC reasons that the statutory term “unavailability of the Director” is a relatively general term that encompasses permanent unavailability, including unavailability owing to resignation. This is consistent with statutes using similar language, including 10 U.S.C. 132(b), which requires the Deputy Secretary of Defense to act on behalf of the Defense Secretary if the Secretary “dies, resigns, or is otherwise unable to perform the functions and duties of the office,” (emphasis added) and the Federal Vacancies Reform Act itself, 5 U.S.C. 3345(a) (covering settings when an officer “dies, resigns, or is otherwise unable” to perform the office’s functions). OLC cites the FVRA in its analysis.
Although there is a bit of ambiguity, OLC’s conclusion seems correct. Some agency-specific statutes governing who can act for a missing Senate-confirmed officer specifically mention that an acting official may serve in the event of an “absence or disability” or a “vacancy in the office.” 42 U.S.C. 902(b)(4) (regarding Social Security Commissioner). But 12 U.S.C. 5491(b)(5) does not mention the term “vacancy,” and some commentators have suggested that Dodd-Frank accordingly does not authorize the Deputy Director to act when the reason for “unavailability” is that the office is vacant. On the other hand, the Director is surely unavailable if he or she has resigned (or died, for that matter), so as a textual matter, the broad term covers the situation. And other statutes don’t mention the term “vacancy” either. For example, 29 U.S.C. 552 requires the Deputy Secretary of Labor to step in for the Secretary in the event of “death, resignation, or removal . . .” or “absence or sickness of the secretary.” This covers several specific reasons for vacancy, but does not mention the term. (This statute and other similar ones are among 41 statutes listed in the FVRA’s legislative history as agency-specific statutes that cover vacancies.) As with the Labor Department statute, “absence or unavailability,” in 12 U.S.C. 5491, also seems aimed at covering a range of causes for inability to act.
Moreover, 12 U.S.C. 5491 specifically uses the term “Acting Director” for the Deputy Director’s new role, paralleling the earlier-enacted FVRA’s usage in describing the person who steps into a vacant office as an “acting officer” or one who serves in an “acting capacity.” 5 USC 3345(a), (b). This further confirms that 12 U.S.C. 5491 applies when the Director’s office is vacant.
While some commentators have suggested that 12 U.S.C. 5491 is somehow related to CFPB independence, Dodd-Frank’s provisions seem to have a different goal. They seem aimed at ensuring that—pending the confirmation of a presidential appointee by the Senate specifically for the post—an Acting Director will be someone with experience in the agency. In that respect, Dodd-Frank resembles numerous other agency-specific statutes, especially for executive branch agencies. For example, the Deputy Defense Secretary “shall” serve as Acting Secretary of Defense when necessary. 10 U.S.C. 132(b). And the Deputy Education Secretary “shall” serve as acting Secretary of Education when necessary. 20 U.S.C. 3412(a)(1).
The main disputed issue now seems to be whether 12 U.S.C. 5491 is the sole method of designating an acting Director, or whether the President can still elect to fill the vacancy by invoking the FVRA’s provision that he may “direct a person who serves in a Senate-confirmed office . . . to perform the functions and duties of the vacant office temporarily in an acting capacity.” 5 U.S.C. 3345(a)(2). Here, the “exclusivity” language from the FVRA is central; it appears below, with critical language bolded.
5 U.S.C. 3347(a) Sections 3345 and 3346 are the exclusive means for temporarily authorizing an acting official to perform the functions and duties of any office of an Executive agency (including the Executive Office of the President, and other than the Government Accountability Office) for which appointment is required to be made by the President, by and with the advice and consent of the Senate, unless—
(1) a statutory provision expressly—
(A) authorizes the President, a court, or the head of an Executive department, to designate an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity; or
(B) designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity . . . .
(b) Any statutory provision providing general authority to the head of an Executive agency (including the Executive Office of the President, and other than the Government Accountability Office) to delegate duties statutorily vested in that agency head to, or to reassign duties among, officers or employees of such Executive agency, is not a statutory provision to which subsection (a)(1) applies.
OLC argues that the exception modifies only the “exclusive” term in “exclusive means” in 5 U.S.C. 3347, so that the FVRA’s mechanisms remain available as non-exclusive alternatives even if an agency-specific statute—such as 12 U.S.C. 5491—provided a different means of designating an acting official.
Lederman has already pointed out that despite OLC’s arguments, 12 U.S.C. 5491(b)(5) is mandatory. It states that the Deputy Director “shall” serve as Acting Director. If the FVRA’s mechanisms remain as alternatives, that Dodd-Frank language becomes optional, rather than mandatory. If that weren’t enough, the Dodd-Frank language thereby becomes largely duplicative. That is because the FVRA already provides as a default that the “first assistant” is to serve as the “acting” officer. 5 U.S.C 3345(a)(1). Lederman has also heavily critiqued OLC’s use of legislative history, criticisms I agree with but will not repeat here.
I write to identify a few additional arguments from text and from legislative context. If the exception to the “exclusive means” language of the FVRA is understood to leave the FVRA mechanisms in place as alternatives to the Dodd-Frank provision in 12 U.S.C. 5491, it creates numerous textual difficulties.
First, as already noted, this interpretation turns the word “shall” in Dodd-Frank into a “may” and makes 12 U.S.C. 5491 mostly superfluous. Second, if understood as alternatives, the statutory provisions conflict if the President invokes any FVRA mechanism besides the default, resulting in the present pickle. That is because neither statute provides a mechanism for selecting among the alternatives. This is in sharp contrast to the situation where the FVRA alone applies (with no agency-specific statute), because the FVRA lays out the default situation (the “first assistant” takes over), while carefully specifying that the “President, and only the President” may, “notwithstanding” the statutory first assistant default, select other individuals to act. 5 U.S.C. 3345(a). It seems highly unlikely, given the FVRA’s specificity on this point, that Congress would silently convey additional presidential authority to freely choose an FVRA mechanism over a specific and mandatory agency statute.
By contrast, if the FVRA’s “unless” clause excepting agency-specific statutes, is understood to give full effect to agency-specific statutes with mandatory language, rather than leaving FVRA mechanisms as alternatives, the two statutes can be readily read together harmoniously. The FVRA’s “unless” exception in 5 U.S.C. 3347 is given effect; 12 U.S.C. 5419(b)(5)’s “shall” retains its mandatory quality; and that provision is not rendered surplusage.
Conceivably, there could be a setting in which the FVRA might remain as an alternative, even with an agency-specific statute. A permissive agency-specific statute that authorizes (but does not require) the President to choose a particular acting official might fit the bill. For example, the agency-specific statute for the Social Security Commissioner provides that the Deputy Commissioner shall serve as acting commissioner “unless the President designates another officer of the Government as Acting Commissioner.” 42 U.S.C. 902(b)(4). This stands in sharp contrast to 12 U.S.C. 5491(b)(5), which contemplates no such presidential exception to the mandatory designation of the Deputy Director.
Lastly, the argument about how to read the two statutes together has to be understood in legislative context. The FVRA was enacted in reaction to perceived abuses by the Clinton Administration, particularly in the Justice Department, in designating multiple unconfirmed individuals to serve as “acting” officials for long periods of time. These included an acting Solicitor General, and multiple acting Assistant Attorneys General. The design of the statute was to preserve the Senate’s prerogative to confirm officers of the United States which still permitting a reasonable degree of agency function. By contrast, the OLC’s interpretation of the FVRA as providing additional alternatives to a perfectly functional agency-specific statute would perversely expand the President’s flexibility to delay deliberation and a Senate confirmation vote on the CFPB Director, in direct tension with the FVRA’s design.
The central concern of the debate over who will be Acting Director of the CFPB is not presidential control, but the Senate’s constitutional advice and consent function. 12 U.S.C. 5491 ensures continuity in agency function during a vacancy, while also protecting Senate confirmation prerogatives from potentially strategic presidential action, much like the FVRA’s time limits on acting appointments, including those made by the President. The President can, at any time, nominate an individual to serve as CFPB Director, triggering the Senate confirmation process. But he does not have the power to choose the Acting Director. Congress has already identified that individual by statute.