Game Of Thrones: CFPB Edition

When “Game of Thrones” finished the first half of the season earlier this year, its 17 million weekly viewers were left with a problem: they had a year, at least, to wait until the second half of the final season began.  What could they possibly watch until then to get their fix of court intrigue, power struggles for rule and dragons battling zombies?

The world is full of prestige TV — but “Game of Thrones” fans loudly declaimed that nothing, nothing could possibly fill the hole left behind by their favorite weekly battle for control of the throne of Westeros.

And, when it came to fictional TV, those fans were probably right. But luckily, every so often reality will succeed where fiction fails — and in 2017, those impatiently waiting for “Game of Thrones” to conclude got something of an unexpected halftime show to fill the void while they wait.  It just happened to be airing on CNN instead of HBO or Netflix.

Game Of Thrones: CFPB Edition.

Spoiler alert — there are a lot more lawyers and far fewer dragons.

But other than that minor difference, the contours of the plot are surprisingly similar. When the old executive director Richard Cordray left his position before his term ended — putatively to run for governor of Ohio — he kicked off something of a leadership crisis as two potential interim heads stepped forward into the role — or at least tried to.

Interim head number one is current OMB head Mick Mulvaney, who was handpicked by President Trump to oversee the consumer watchdog until a permanent head could be found. Interim head number two is Leandra English, former CFPB chief of staff turned deputy director who was Cordray’s handpicked choice to lead the agency until a permanent head was put into place.

Both sides claim federal law is on their side. Team Mulvaney claims that The Federal Vacancies Act of 1972 gives President Trump the power to fill interim positions.  Team English claims that the Federal Vacancies Act is superseded in this case by Dodd-Frank, which enabled the CFPB and instructed that the deputy director is next in the chain of command in the organization if the executive director is “away.”

Luckily — because we don’t live in the middle ages — the two sides did not raise armies and decide to fight it out on the field of battle.  Instead, they assembled teams of lawyers, scores of amicus briefs and a Senatorial letter writing campaign before heading out to the modern battlefield.

A courtroom.

The Legal Battle(s)

The first salvo in the legal fight was fired by Leandra English, who  sought a temporary restraining order to prevent Mulvaney from taking control of the agency while the legal issues were sussed out.  A federal court ruling last month denied that request to block Mulvaney from assuming the directorship.

However, the denial was only on the restraining order itself — no ruling has been offered on the merits of English’s case as of yet. That case is ongoing — and as of last week, English’s lawyers had filed a request for a preliminary injunction last week.

U.S. District Court Judge Timothy Kelly, a Trump appointee, will hear oral arguments in that case at the end of this week (December 22). The ruling could come any time after that.

The case, perhaps unsurprisingly, has attracted a lot of outside attention.  As of today, English’s case is supported by 5 separate amicus briefs submitted by consumer advocates, Democratic attorneys general, lawmakers and consumer finance scholars. One brief is signed by 30 current and former members of Congress, including Dodd-Frank architects Barney Frank and Christopher Dodd. That brief explicitly explains that the intent of the Dodd-Frank law was to see the deputy director take over in the absence of the director to insulate the CFPB from politics.

“In creating the Bureau, lawmakers determined that it needed to be independent in order to fulfill its mission,” the amici argue.

University of Pennsylvania Wharton School assistant professor Peter Conti-Brown affirms that the Trump administration has the right to fill the role — but that it could not validly choose a White House staffer like Mulvaney for the job.

“President Trump does not have the legal authority to appoint a White House official to lead the CFPB,” Conti-Brown wrote.  Conti notes that the enabling legislation for the CFPB calls for it to be “independent” and “within the Federal Reserve system.” Fulfilling those two requirements, Conti argues, means a non-White House employee must be put into the role.

That argument was echoed in the second lawsuit, filed by the Lower East Side People’s Federal Credit Union in a U.S. District Court in New York.

These suits, most legal experts note, could go on for quite some time — as the forthcoming ruling in the preliminary injunction case can (and almost certainly will) be appealed by either side.  However, legal experts note that these lawsuits could also be stopped instantly should President Trump put a permanent executive director in the role — a power that no one contests he has.

The Letter Writing Campaign

In a parallel effort, reports Reuters, Democratic Senator Elizabeth Warren, the original architect of the CFPB, is writing to anyone, and everyone, to stop Mick Mulvaney’s plan to fill the ranks of the U.S. consumer financial watchdog with what she calls “political allies.”

“Your naked effort to politicize the consumer agency runs counter to the agency’s mission to be an independent voice for consumers with the power to stand up to Wall Street banks,” Warren, who helped create the CFPB, wrote to Mulvaney.

And that was just one letter directly to Mulvaney; in a separate letter, Warren asked the OPM (Office of Personnel Management) to review Mulvaney’s “unprecedented and unjustified” plans.

Letter number three went to Mulvaney and English — and requests a review of ongoing enforcement actions at the CFPB.

Reuters reported earlier this month that a potential multimillion-dollar settlement with Wells Fargo is among the enforcement actions under review amid the change in CFPB leadership.

Spokespeople for Mulvaney and the OPM did not immediately respond to requests for comment.

Warren also argues that Mulvaney’s publicly stated plan to start “staffing up with more permanent political people so the professional staff here have a better feel for where the administration wants to take the bureau,” is entirely unacceptable given the CFPB’s mission to be an independent agency.

The Changing CFPB

Despite the drama around his leadership — the Mulvaney era has already seen some fairly big changes. The CFPB has temporarily suspended an investigation into a bail bond company called Nexus and halted data collection at the agency as a whole, citing “cybersecurity” fears.

Mulvaney has also named Rep. Jeb Hensarling, R-Texas — perhaps the CFPB’s biggest foe in Congress — to a senior advisory role with the consumer watchdog. Reuters reported earlier this month that the multi-million dollar Wells Fargo settlement might also be under review due to the change in leadership.

However, some changes Mulvaney has sought to make have not gone through. He initially froze all payments to fraud victims — but beat a hasty retreat on that two days later when public outcry became loud and pressing.

Mulvaney has also allowed some internal promotions and personnel transfers, despite a hiring freeze.

But, by all reports, things within the CFPB — given the situation outside it — are a bit tense.

According to reports in The Intercept, CFPB staffers (and apparent Harry Potter fans) have allegedly started a secret resistance group they’ve dubbed “Dumbledore’s Army” — the name for the resistance group in the Harry Potter books.

Because nothing says effective consumer protection like the agency tasked with protecting it fighting on two legal fronts — with its own internal resistance group.