Leandra English Resigns; Quietly (sort of) Ends Another CFPB Chapter

On Friday afternoon Leandra English announced that she would resign her position as Deputy Director of the CFPB (now BCFP or Bureau). English was the Bureau's chief of staff who was elevated in the 11th hour by outgoing Director Richard Cordray in the hopes she would succeed him. A legal battle lasting more than six months ensued almost immediately, as President Trump instead appointed his budget director, Mick Mulvaney, to lead the Bureau until he could name a permanent replacement. According to the Federal Vacancies Reform Act, Mulvaney could serve a maximum of 210 days (which ended June 22), unless a nominee was being considered.

With just six days to spare, on Saturday June 16 Trump nominated Kathy Kraninger, an associate director at the Office of Management and Budget (OMB) under Mulvaney, for the job.

Deepak Gupta, her attorney, posted the following statement from English on his Twitter account:

"I will be stepping down from my position at the Consumer Financial Protection Bureau early next week, having made this decision in light of the recent nomination of a new Director. I want to thank all of the CFPB's dedicated career civil servants for your important work on behalf of consumers. It has been an honor to work alongside you."

He also added his own comment,

"Now that President Trump has decided to seek Senate confirmation of a new Director for the independent Consumer Financial Protection Bureau, Ms. English is stepping down and we intend to file court papers on Monday to bring the litigation to a close."

Although Mulvaney claims to have had no part in the selection of Kraninger as the nominee, one can't help but note the similarity between former CFPB director Richard Cordray's surprise 11th hour promotion of Leandra English (also a relative unknown outside the Bureau) and Trump's nomination of Kraninger, also an unknown. 

Consumer groups, which have vigorously opposed the temporary appointment of Mick Mulvaney, have cried foul over the President's nomination of Kraninger, noting that she has zero consumer protection experience. 

The LA Times quoted Bartlett Naylor, a financial policy advocate at Public Citizen who said,

"Kraninger ... has neither experience as a regulator nor expertise in consumer financial issues. The nation's leading consumer financial regulator is not an entry-level job."

Karl Frisch, executive director of consumer group Allied Progress, said,

“This looks like nothing more than a desperate attempt by Mick Mulvaney to maintain his grip on the C.F.P.B. so he can continue undermining its important consumer protection mission on behalf of the powerful Wall Street special interests and predatory lenders that have bankrolled his career. Kraninger has absolutely no relevant experience that indicates she is qualified to be America’s chief consumer advocate.”

On the conservative side, J.W. Verret, a professor at George Mason University’s Antonin Scalia Law School, said,

"[she is a] mid-level budget staffer lacking expertise, chosen to lead one of the most powerful agencies in the government."

White House spokeswoman Lindsay Walters said,

"[Kraninger] will bring a fresh perspective and much-needed management experience to the [bureau], which has been plagued by excessive spending, dysfunctional operations, and politicized agendas. As a staunch supporter of free enterprise, she will continue the reforms of the Bureau initiated by Acting Director Mick Mulvaney, and ensure that consumers and markets are not harmed by fraudulent actors. The White House hopes that she will be promptly confirmed by the Senate."

Meanwhile, we'll get our first sense of Kathy Kraninger soon, as a Senate hearing has been set for July 19.

Reacting to the news that Leandra English would be dropping her efforts to temporarily lead the Bureau, Linda Jun, Senior Policy Counsel at Americans for Financial Reform, said:

"By taking on the acting director role, Leandra English courageously stood up for the independence of the Consumer Financial Protection Bureau at a particularly difficult and challenging time. Now that the president has engaged in the process of nominating a director for Senate consideration, something he should have done long ago, the time is right to thank Ms.English for her service to consumers and to the law. The public interest community will focus on ensuring that the next director is a champion of consumers in the face of Wall Street and predatory lenders."

And so begins a new chapter of the BCFP, in which Mick Mulvaney is the uncontested temporary leader.

insideARM perspective

As debt collection rulemaking has been pushed out (yet again) on the Bureau's calendar -- this time to at least March 2019 -- the possible change of hands (again) of Bureau leadership figures prominently in the ARM industry's fate. Acting Director Mulvaney has said that, given the volume of consumer complaints related to debt collection, it should be (is?) among his highest priorities.

It's unclear whether pushing the date out means that he and his team need time to fully re-consider (start from scratch, even?) the Notice of Proposed Rulemaking that had already been drafted and was on the cusp of being released when Cordray resigned to run for Governor of Ohio, that he hopes to put rulemaking for the industry in the lap of the next guy (or woman), or that he simply wanted to first re-issue other rules that had already been written.

What we do know is that in May the Bureau issued it's spring update to the OMB's Unified Agenda, including this statement:

The Bureau is under interim leadership pending the appointment and confirmation of a permanent director. In light of this status, Bureau leadership is prioritizing during coming months:

• Meeting specific statutory responsibilities
• Continuing selected rulemakings that were already underway 
• Reconsidering two regulations issued under the prior leadership

The Bureau has recently launched a "call for evidence" to ensure that it is fulfilling its proper and appropriate functions to best protect consumers. As part of that initiative, we are seeking public feedback through a number of Requests for Information (RFIs) with respect to the regulations that the Bureau inherited from other agencies as well as regulations that the Bureau itself promulgated and issued. In addition, we are in the process of assessing the effectiveness of three rules pursuant to section 1022(d) of the Dodd-Frank Act. Future agendas will take into account the feedback received through the call for evidence and the assessment projects to identify areas in which issuing, modifying, or eliminating rules may be appropriate to achieve the Bureau’s strategic goals and objectives.

I am certain of one thing; the next eight months will be as event-filled as the last eight have been.