This article was published by The McAlvany Intelligence Advisor on Wednesday, November 29, 2017:

English: South Carolina State Senator Mick Mul...

Mick Mulvaney

Regular readers will remember that just a week ago Monday MIA covered all the reasons that the Consumer Financial Protection Bureau (CFPB) was unconstitutional. It quoted from a court ruling where judges found the agency to be unconstitutional. It found commentators explaining why: the bureau’s designers in the Party and the Obama administration deliberately recombined the separate powers – create rules, interpret rules, enforce rules – into a single entity. Readers will remember the most egregious betrayal of the of all: the bureau’s funding didn’t come from Congress but from another illegal agency, the Federal Reserve. This was to ensure that Congress couldn’t, in a fit of Constitutional awareness, defund it.

And then something happened. The head of the agency – originally nominated by the Marxist Obama as a “recess” appointment because he couldn’t get Congress to confirm him the regular way – decided to leave the bureau before the end of his term. MIA suggested that this presented a great opportunity for Mr. Trump to obliterate the agency.

That didn’t happen, but the next best thing did: the bureau is now frozen into place, with its 1,623 employees playing on their iPhones and emailing photos of themselves to friends while working, or more accurately, not working.

When Mick Mulvaney, Trump’s OMB Director whom he appointed interim director of the CFPB, showed up for work on Monday morning, he brought with him a box of donuts and an agenda. First was sending a memo to senior staff members to ignore an email that Leandra English – the deputy director appointed by Richard Cordray to succeed himself when he left the previous Friday – sent to everyone that she was officially in charge and to ignore Mulvaney. That didn’t turn out well for English, as the general counsel for the CPFB advised senior officials at the agency “to act consistently with the that [OMB] Director Mulvaney is the acting director of the CFPB.”

Mulvaney put his stamp of authority on the CFPB almost immediately, issuing a memo telling the bureau’s employees to disregard English’s memo, followed by putting a 30-day freeze on the issuance of new rules and hiring additional people. Monday afternoon Mulvaney held a conference, in effect calling his takeover of the bureau a success and laying out his plans to freeze the bureau in place, at least for the time being. One staffer, expecting a noisy between the two competing heads, said “There’s no chaos,” while a government contractor working at the bureau confirmed the fact: ”As far as they told me, it’s business as usual.”

Mulvaney made it clear that there’s a new sheriff in town: “Anyone who thinks that a Trump administration CFPB would be the same as an Obama administration CFPB is simply being naïve. Elections have consequences at every agency, including the CFPB.”

The battle wasn’t over. English filed a demand that Mulvaney be restrained from running the bureau, claiming that the Dodd-Frank that Obama and his Democrats inserted into the bill creating the monster overrode presidential authority. Claiming that since the language was written in 2010, long after the passage by Congress of the Federal Vacancies Reform Act of 1998, it must take precedence.

Unfortunately for English, the matter has been referred to one of Trump’s judges, Timothy J. Kelly at the U.S. District Court for the District of Columbia. Kelly said he would take the matter under advisement immediately and rule on English’s claim within days. Expect the ruling to favor Trump and Mulvaney, and to leave English out in the cold and looking for other work. [His ruling on Tuesday rejected English’s request.]

Mulvaney’s agenda is likely to be expanded to include delaying the enactment of recently issued rules on payday loans, easing mortgage-writing underwriting standards, and reassessing pending lawsuits against companies like student-loan service company Navient Corporation.

While nothing in the commentary surrounding the “showdown” at the CFPB on Monday mentioned its unconstitutionality, there was this from Karen Shaw Petrou, managing partner at Federal Financial Analytics, who sees what’s happening at the CFPB as a result of Mulvaney’s move to take over the agency and English’s filing of a restraining order to keep him from doing so: “People will be sitting in their offices reading things and working on things but [not] doing anything about them. Other than moving the flower pots or changing the coffee in the machine, this is a standstill.”

Short of abolishing the abhorrent and loathsome bureau (which would take 60 votes in the Senate), this is clearly the next best thing.



The Wall Street JournalDonald Trump’s Appointee Asserts Control Over CFPB for Now

The Wall Street JournalJudge in CFPB Leadership Lawsuit Says He Will Act Quickly

The Wall Street JournalWhite House Criticizes CFPB for Naming Own Temporary Chief

Federal Vacancies Reform Act of 1998

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