Who will lead the CFPB if Director Cordray leaves the top spot?

Ballard Spahr: The process to replace Cordray

Industry rumors are nearing a boiling point on whether or not Consumer Financial Protection Bureau Director Richard Cordray will leave the bureau to run for Ohio governor; be it through resignation or termination.

Just this past weekend, Corey Lewandowski, the former campaign manager for President Donald Trump, told Meet the Press that he wants to see another big fish fired. Lewandowski argued that Trump's new chief of staff, John Kelly, should fire Cordray since he is going to run for Ohio governor.

Lewandowski isn’t the only one calling for the head of the bureau; he is simply the latest in a long string of people citing Cordray will run for governor and should resign.

But as people are hyper focused on whether or not Cordray will resign, they’re missing an even bigger question that impacts the future of mortgage finance: Who will run the CFPB after Cordray?

In a recent blog post from Ballard Spahr, Alan Kaplinsky answered the question, “Can President Trump appoint an acting director upon Cordray’s departure?”

The short answer is yes.

For starters, the second-in-command position at the CFPB has been vacant for nearly two years. In July 2015, Steven Antonakes announced he was stepping down as acting director for the bureau. Meredith Fuchs served as acting deputy director for about 6 months until David Silberman ultimately stepped in to the position as acting director back in January 2016. He’s been in the position ever since.   

From the blog:

It appears Congress did not expressly provide in Dodd-Frank for how a vacancy should be filled if the CFPB Director were to resign.  Dodd-Frank provides only that the Deputy Director “shall serve as acting Director in the absence or unavailability of the Director.”  It does not expressly authorize the Deputy Director to serve as Acting Director when a vacancy in the position of Director is created.  As a result, a vacancy can only be filled using one of the Vacancies Act’s three permissible methods.

Since President Trump would have the option of making his own appointment instead of allowing Mr. Silberman to serve as the Acting CFPB Director, it can be assumed he would make his own appointment.

So who would President Trump choose?

To Kaplinsky, Treasury Secretary Mnuchin would be the obvious and logical person to serve as acting director.

From the blog:

It should be noted that the Dodd-Frank Act authorized the Treasury Secretary “to perform the functions of the Bureau under this subtitle until the Director of the Bureau is confirmed by the Senate.”  The fact that Congress considered the Treasury Secretary to be the appropriate person to run the CFPB until a Director was confirmed provides strong support for Secretary Mnuchin’s appointment to serve as Acting Director.


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