In the ongoing battle over the interim leadership of the Consumer Financial Protection Bureau, the attorney for ousted interim leader Leandra English is arguing that a tweet by President Donald Trump shows he has no intent on allowing the bureau to remain independent.
A review of former President Barack Obama's Twitter feed by the Washington Free Beacon, however, showed at least six times the former president tweeted about the CFPB, including one tweet from 2011 in which he urged the public to support Richard Cordray being appointed as director.
"There is some degree of hypocrisy because no one has ever questioned President Obama's public statements about the CFPB," said constitutional and administrative law expert John Shu, who worked for both Bush administrations.
On Dec. 8, President Trump tweeted in response to a Reuters report which said Cordray, the outgoing director at the time, had reached a settlement with Wells Fargo over alleged mortgage lending abuses.
"Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased," the president tweeted. "I will cut Regs but make penalties severe when caught cheating!"
When Cordray left the CFPB's directorship, he hastily appointed English as interim director, while President Trump simultaneously named Mick Mulvaney as acting director. English sued, but her first request for an injunction to prevent Mulvaney to work as the acting director has been denied, and English is appealing.
After a December hearing on the matter, English's attorney, Deepak Gupta, told reporters, "At the very moment that they are saying that there's no threat to the agency's independence, the president is tweeting about a particular enforcement matter involving a particular bank and that demonstrates better than anything else that the threat to independence here is not just hypothetical but real," Gupta told reporters."
However, in December of 2011, President Obama asked the public to lobby Republicans to install Cordray as his preferred director.
"With a director, the @CFPB can make sure Americans are treated fairly by mortgage brokers, payday lenders, and debt collectors," Obama tweeted in 2012, which could be interpreted as telling the CFPB what kind of financial institutions to focus on.
Shu says supportive statements should be seen as equally influential as criticisms, because both kinds of statements are instructive to the bureau for how they allocate their efforts and resources.
But analyzing tweets may be moot. Shu says the arguments about what a president does or does not say about an administrative agency are not likely to find much weight in the courts.
"A president's public statements, whether in support of or critical of an administrative agency, or critical in saying that the agency isn't doing enough—completely irrelevant," Shu said. "It is legally irrelevant to the question of whether the president gets to pick his or her own acting director."
"So for example, the IRS is an administrative agency. There are very few politicians that I can think of who have never criticized the IRS, or our tax system at some point," Shu added. "That does not prevent them from heading up the IRS, if they're confirmed to do so, or, from picking somebody, if they're president, picking their own person to run the IRS assuming the Senate confirms them."
Shu also believes the ongoing legal battle is exaggerated, because the questions only surround that of appointing the interim director, not the appointment of the full-time director.
Other controversies surround the CFPB in general, as well as the legal challenge from English.
In the ongoing legal cases, the CFPB's lawyers do not represent English because the general counsel's office agreed that Mulvaney was the interim director. As a result, English has had to hire her own lawyers. But in a recent interview on CNBC, Gupta acknowledged that English was not paying the legal bills, which has raised eyebrows.
Additionally, a second suit on the matter has been filed in U.S. District Court Southern District of New York, in which the Lower East Side People's Federal Credit Union is the plaintiff, but is still seeking to have English installed as the acting director.
"What's highly unusual is, the credit union has suffered no injury," Shu said. "And so, why they are asking the New York district court to settle this issue that the D.C. court is already working on, that's very unusual."
Published under: Consumer Financial Protection Bureau