The Consumer Financial Protection Bureau is a rare gem in the US financial regulatory apparatus, a regulator that actually tackles fraud and criminality by monied, powerful financial institutions, exacts meaningful penalties from them, and forces them to stop. They're one of the only things standing between you and highway robbery.
Alas, the CFPB is about to lose its leader — inaugural director Richard Cordray is planning a run for the Ohio governorship — and Trump and his regime are plotting to gut the agency by appointing Mick Mulvaney to serve in his place, despite the fact that Mulvaney is on record as wanting to shut down the agency and also only plans to serve in a part-time capacity; and despite the fact that the law clearly states that deputy director Leandra English should get the job (English is suing Trump).
Enter Steven A. Engel, a lawyer who represented the notorious loan-sharks NDG Financial Corp when the CFPB started to regulate its illegal conduct (which included fraudulently taking sums out of Americans' savings accounts). Engel was appointed to serve as an assistant Attorney General by Trump, then confirmed by a Senate voice-vote.
Engel is the author of a controversial memo that argues that despite its plain language and long jurisprudence, the Federal Vacancies Reform Act allows Trump to bypass the agency's deputy director and appoint its sworn enemy in her stead.
The memo has been roundly criticized by legal scholars, who say that Engel started with the conclusion that he wanted to shut down the agency and then worked backward to find a legal justification for his position.
In the OLC memo, Engel argued that the Federal Vacancies Reform Act allows President Donald Trump to name Mulvaney as acting director of CFPB, instead of the current deputy director, Leandra English. In response, English has sued the president and Mulvaney, seeking an injunction to prevent the appointment.
The situation has caused chaos within the agency, which has the mission of safeguarding consumers against unscrupulous financial products. The CFPB's general counsel, Mary McLeod, issued a three-page memo over the weekend agreeing with OLC's take and saying that personnel should "act consistently with the understanding that Director Mulvaney is the Acting Director of the CFPB." McLeod leaned heavily on the OLC memo in her analysis, which was bitterly contested by several legal scholars.
WHITE HOUSE MEMO JUSTIFYING CFPB TAKEOVER WAS WRITTEN BY PAYDAY LENDER ATTORNEY [David Dayen/The Intercept]