Mick Mulvaney

The power struggle at the Consumer Financial Protection Bureau is an easy legal decision in favor of the Trump administration and Sen. Mike Lee says he hopes the change at the top will also lead to the bureau getting reined in or killed entirely.

Last week, CFPB Director Richard Cordray resigned from his post and handed the position to his deputy, Leandra English.  The Trump administration claimed it has the power to name an acting director, and tapped budget director Mick Mulvaney to take over the job.

English then filed suit to block Mulvaney’s installation but a federal judge sided with the administration.

Sen. Lee, R-Utah, who sits on the Senate Judiciary Committee, says this is a very simple legal question.

“The legal issues sound intricate but they paint a pretty clear picture, which is that Mick Mulvaney is in charge,” said Lee.

“There’s a law called the Federal Vacancies Reform Act.  That law grants the president the power to appoint acting department heads.  The idea, of course, is that the President of the United States, having been duly elected by the American people, should be able to choose someone who has been confirmed by the Senate to lead each department,” said Lee.

The CFPB was created through the Dodd-Frank financial reform legislation that was created on the premise of protecting Americans from predatory lenders and other shady financial professionals who helped lay the groundwork for the 2008 financial crisis.

Cordray, English, and their allies contend that the legislation allows the deputy director (English) to assume the job if the permanent director is absent.

Lee is not buying that interpretation.

“The problem with that argument is that Cordray isn’t really absent or unavailable because those words connote a temporary absence.  Cordray has resigned.  He’s not returning.

“Although she was his deputy, he’s no longer absent or unavailable in the sense in which that term operates and so the Federal Vacancies Reform Act applies.  That gives the president the power to appoint a Senate-confirmed person to serve as acting director, and that’s Mick Mulvaney,” said Lee.

Lee isn’t sure if English will try her luck in another court but he’s confident she’ll lose in every forum.

English also argues that the CFPB was created to be fiercely independent of politics and therefore President Trump should not get to choose Cordray’s successor.  Lee says the Dodd-Frank bill made no mention of bypassing the vacancies law for the sake of the CFPB.

He says that argument also bolsters his contention that the CFPB is unconstitutional.

“That would cause it to come ever further untethered from the Constitution.  The executive branch of the United States government is supposed to be run by the President of the United States.  If we’re going to set something up that is completely insulated from the American people, other than the judiciary, you end up with a problem,” said Lee.

And Lee believes it’s that unchecked power that Democrats are reluctant to give up.

“They’ve got a good thing going.  They run this agency that has de facto lawmaking power and law enforcement power and law interpretation powers.  They’ve taken all the branches of government and rolled it into this little mini-autonomous government.  It’s one of the reasons I have so many issues with the CFPB.

“While it was created with the best of intentions, it was poorly designed.  It was set up to be unaccountable.  Ultimately, it’s an unconstitutional agency,” said Lee.

“They dress it up in terms of saying, ‘We want this up to operate outside the political winds of change.  Think about what that means.  What that means is they don’t want the American people to have a say in the operation of their own government as it relates to the CFPB,” said Lee.

Lee was encouraged by reports of Mulvaney being “appalled” by the power he now has in leading the CFPB.

“That is exactly the kind of person we want in an office like that as long as it continues to exist, which it shouldn’t in its current form.  We want somebody in there that is appalled by the breadth, the scope of the unconstitutional powers his agency wields,” said Lee.

And what is the CFPB doing with this unaccountable power?

“[It has the power to] come up with new laws and new regulations governing reporting requirements, imposing new affirmative obligations legally on anyone who interacts with consumers or whether that’s ordering the consolidation or restructuring of this or that business.  They’ve got all kinds of authority that is very susceptible to being abused.

“When they come up with new rules, those rules have the effect of generally applicable federal law.  And yet it’s a law that’s put in place without the assent of anyone that’s been elected to public office.  That’s very disturbing,” said Lee.

Lee is also bullish that this public spat over who should run the CFPB will spur momentum to kill or greatly reform the bureau.

“I’d like to see it either eliminated or to have its wings significantly clipped.  I’d like to see it operate in a manner that leaves it accountable to oversight by Congress.  Currently, its funding is provided not by Congress but through the Federal Reserve.  So it’s not even accountable to Congress for the way it spends money.

“I think it needs to be operating in the capacity of an executive branch agency rather than a sort of fourth branch of government that’s super-powerful and that’s above the restraints imposed by the Constitution’s structure,” said Lee.

While Lee is not guaranteeing any legislative wins on this issue, he says a lot of his colleagues are ready to act.

“There’s a lot of appetite for doing so.  I am reluctant anytime to predict anything in particular will certainly pass, but I will say there is a lot of appetite for doing it.  We should be doing it.  We ought to put it on a must-pass vehicle and get it passed,” said Lee.