How the OLC Has Gone Astray on the CFPB

by Jeff Sovern

The Department of Justice's Office of Legal Counsel has now issued an opinion which, not surprisingly, expresses the view that the president can name the acting director of the CFPB. It argues that even though the VRA specifies that it is the "exclusive" way to fill vacancies "unless another statute 'expressly'  provides another mechanism for acting service," and such a statute exists here in the form of the Dodd-Frank Act, the VRA remains an alternative way to fill vacancies. It goes on to conclude that "when the President designates an individual under the [VRA] outside the ordinary course of succession, the President's designation necessarily controls.  Otherwise, the [VRA] would not remain available as an actual alternative in instances where the office-specific statute identifies an order of succession, contrary to Congress's actual intent."

But even assuming that the VRA provides an alternative way to fill the vacancy, there is a more plausible interpretation than the OLC's conclusion in the last quoted sentences above.  Suppose that the CFPB director had not appointed someone to serve as deputy director.  In fact, Director Cordray did not appoint a deputy director until his last day at the Bureau (he had named an acting deputy director, but imagine that he hadn't or that person had left the CFPB before the director did). In that case, the Dodd-Frank Act's succession plan would not have operated, and an alternate way for someone to become acting director would indeed be needed.  The VRA fills that gap.  Thus, the VRA would indeed, as the OLC wishes "remain available as an actual alternative in instances where the office-specific statute identifies an order of succession," and Congress's "actual intent" would not be frustrated.

The OLC's flawed interpretation would actually frustrate Congress's intent in enacting the Dodd-Frank Act succession provision. The OLC's opinion concedes that the Dodd-Frank Act's "reference to 'unavailability' is best read to refer both to a temporary unavailability . . . and to the Director's being unavailable because of a resignation . . . ."  In other words, the OLC agrees that the Dodd-Frank text provides that the deputy director is to serve as the acting director when the director resigns. But the OLC's interpretation of the Dodd-Frank Act succession provision would render that text mere surplusage. The VRA already provided that among the possible acting leaders of an agency is "the first assistant to the office of such officer," which for the CFPB translates into the Bureau's deputy director.  In that light, what would have been the point of saying so in the Dodd-Frank Act?  

As Adam Levitin has pointed out, Congress wanted the CFPB to be independent of the president; it would have wanted the president to have the power to name a leader of the CFPB without senatorial approval only as a last resort, not as a possible first resort. This interpretation accomplishes that goal. The OLC should revise its memo.

UPDATE: Marty Lederman at the Balkinization Blog has a useful post pulling together many of the arguments and responding to my claim above that the OLC's interpretation renders the Dodd-Frank provision redundant. He argues:

[T]he Dodd-Frank provision would still have at least two further functions:  (i) It would make her term indefinite, i.e., until a successor is confirmed, whereas the VRA designation is time-limited; and (ii) it also applies to cases where the Director remains in office but is otherwise "absent or unavailable," e.g., in the case of recusal or debilitating illness.

I don't think that solves the problem.  As for the first argument, about the time limits, the Dodd-Frank provision is not written in such a way as to suggest that eliminating the time limits is its goal. If that were its purpose, we would expect to see something stating that the time limits in the VRA don't apply to the deputy director serving as acting director, rather than a blanket statement that the deputy director serves as acting director. I'm not aware of anything that suggests the Dodd-Frank drafters were concerned about the time limits in the VRA, as opposed to simply insuring that the deputy director becoming acting director, nor can I think of a reason why the time limits would be a special issue for the CFPB, as contrasted with other administrative agencies. As to the second argument, yes, the Dodd-Frank provision applies if the director remains in office, but the OLC (correctly, in my view) found that the Dodd-Frank provision was also intended to govern when the director resigns. In that context, the OLC's interpretation would render the Dodd-Frank provision redundant, and it is that context that is relevant here.


Leave a Reply

Your email address will not be published. Required fields are marked *