End of FVRA time limit on Mick Mulvaney’s Acting Director tenure drawing closer

Ballard Spahr LLP
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The end of the 210-day period during which Mick Mulvaney can serve as CFPB Acting Director under the Federal Vacancies Reform Act (FVRA) in the absence of President Trump’s nomination of a permanent Director is drawing dangerously closer.  Former Director Cordray’s resignation became effective at midnight on November 24, 2017, thereby making November 25 the first day on which the position of CFPB Director was vacant.  President Trump’s appointment of Mick Mulvaney as CFPB Acting Director also became effective on November 25 upon Mr. Cordray’s resignation.  Accordingly, including today, the position of CFPB Director will have been vacant for 194 days, making June 22 the last day of the 210-day period.

FVRA Section 3346(a)  provides:

Except in the case of a vacancy caused by sickness, the person serving as an acting officer as described under section 3345 may serve in the office—(1)  for no longer than 210 days beginning on the date the vacancy occurs; or (2) subject to subsection (b) [which addresses a rejected, withdrawn or returned nomination], once a first or second nomination for the office is submitted to the Senate, from the date of such nomination for the period that the nomination is pending in the Senate.

As an initial matter, it appears that President Trump could not use the FVRA to appoint another Acting Director once the 210-day period has expired.  According to a Congressional Research Service report, because the 210-day time limitation established by Section 3346(a)(1) runs from “the date the vacancy occurs,” the limitation is tied to the vacancy itself, rather than to any person serving in the office.

The absence of a nominee for permanent Director by June 22 would be problematic in several respects.  First, the expiration of the 210-day period could strengthen Leandra English’s claim that she is entitled to be the Acting Director under the Dodd-Frank Act (DFA) provision that provides that the Deputy Director shall serve as Acting Director in the Director’s “absence or unavailability.”

At the April 12 oral argument in the D.C. Circuit on Ms. English’s appeal from the district court’s denial of her preliminary injunction motion, the DOJ indicated that it did not dispute Ms. English’s position that “absence or unavailability” includes a vacancy created by a resignation.  In asserting that Mr. Mulvaney is the rightful Acting Director, the DOJ has relied on the argument that the President can use his FVRA authority as an alternative to the DFA provision.  Since it appears the President could not use the FVRA to replace Mr. Mulvaney as Acting Director after the 210-period expires, Ms. English could argue that she is entitled to be Acting Director because the President’s FVRA authority is no longer available.

To avoid this possibility, Mr. Mulvaney might attempt to remove Ms. English prior to June 22.  While the DFA allows the President to only remove the CFPB Director “for cause,” it does not speak directly to the Deputy Director’s removal.  Since the Director appoints the Deputy Director, presumably the Director could remove the Deputy Director  for any reason.  It is unclear, however, whether Mr. Mulvaney, as Acting Director, would also have that authority.

It is also unclear whether Mr. Mulvaney could appoint a new Deputy Director if he were able to remove Ms. English and whether a new Deputy Director appointed by Mr. Mulvaney would become Acting Director at the end of the 210-day period.  Another open question is whether President Trump could remove Ms. English without cause should she become Acting Director.  (Mr. Mulvaney has asserted on various occasions that President Trump can remove him without cause.)

Second, subject to our comment below, under the FVRA, any action taken by Mr. Mulvaney as Acting Director after 210 days would be void and could not be ratified.  Section 3348(d)(1) provides that “an action taken by any person who [is not acting in compliance with the FVRA] in the performance of any function or duty of a vacant office . . . shall have no force or effect.”  Section 3348(d)(2) provides that “an action that has no force or effect under paragraph (1) may not be ratified.”

We note that in a 1999 opinion, the Office of Legal Counsel indicated that once a nomination is made, even if after the 210-day period has expired, the Acting Director can resume the exercise of his authority.  The opinion describes FVRA Section 3346(a)(2) as containing a “spring-back provision, which permits an acting officer to begin performing the functions and duties of the vacant office again upon the submission of a nomination.”

Of course, Ms. English’s lawsuit continues to be the “wildcard” in any potential scenario.  A ruling in favor of Ms. English would not only be problematic for Mr. Mulvaney’s continued tenure as Acting Director but could also call into question the validity of any actions he has taken as Acting Director.

We are hopeful that President Trump will soon nominate a permanent Director, thereby eliminating these concerns and allowing Mr. Mulvaney to continue to serve as Acting Director pursuant to the FVRA pending confirmation of the President’s nominee.

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