Mulvaney Chosen To Lead Consumer Financial Protection Bureau

Today, November 28, 2017, US District Judge Timothy J. Kelley ruled on who will take up the post as active director of the Consumer Financial Protection Bureau (CFPB). The agency was created during the Obama administration in response to the subprime mortgage financial crisis through Dodd-Frank Legislation.

The dispute over who will emerge as acting director of the Consumer Financial Protection Bureau (CFPB) has been heated and politically charged. Mick Mulvaney was appointed as the acting director of the CFPB by the Trump administration on November 24, 2017. However, Leandra English, who had been serving as deputy director to CFPB, was also named acting director by Richard Cordray when he stepped down from the position that same day. English challenged Mulvaney’s appointment in a lawsuit.

The situation may be further complicated by the fact that Kelly is a Trump-nominated judge, appointed in June 2017 It is expected that English will appeal the decision.

Though currently in the spotlight for murky legal challenges, Mulvaney has championed blockchain technology in the past. Alongside Jared Polis (D-Colorado), he formed the first bipartisan Congressional Blockchain Caucus with support from non-profit cryptocurrency advocacy group Coin Center. In the months that followed, he garnered the attention of the Trump administration and was appointed to the Office of Management and Budget (OMB) by the 45th president.

Advocates for English maintain that though the basis for Trump's authority to appoint Mulvaney to the CFPB stems from the Federal Vacancies Reform Act, which allows the president to appoint an officer of an Executive agency, there is a clause limiting that capacity if "(1) a statutory provision expressly…(B) designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity."

A brief analysis of the Dodd-Frank legislation will show that section 1011 contains a provision referencing a "Deputy Director, who shall (A) be appointed by the Director; and (B) serve as acting Director in the absence or unavailability of the Director." English asserts that she met those qualifications, although she will need to appeal Kelley's decision to continue her legal battle.

A CFPB headed by Mulvaney may be better informed on matters relating to blockchain technology, and would likely issue regulatory measures with deference to Mulvaney's background. This might be good news for those on the sidelines awaiting formal frameworks from seats of authority.

Regardless of who comes to reside in the leadership position at the CFPB, ultimately what is most important remains the agency's regulatory efforts. Whoever spearheads those efforts would best serve consumers by encompassing a thorough understanding of the promise of blockchain technology, because before mass adoption can happen, consumer protections need to be in place.