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New CFPB Deputy Director about to be appointed

Posted in CFPB People, CFPB Rulemaking

The word on the street is that tomorrow Richard Cordray will appoint a new Deputy Director to replace Raj Date who has been serving in that capacity since Jan. 6 of 2012.

I hope Mr. Cordray uses the occasion to inform the public about the Bureau’s contingency plan in the event the D.C. Circuit’s decision in Canning does not get reversed and a court directly holds that Mr. Cordray’s appointment was invalid. We are still researching the contours of the
so-called de facto officer doctrine which some courts have used to hold that actions of invalidly appointed officers are still valid.   If our research indicates that the doctrine does not apply to actions taken by Mr. Cordray, it seems illogical that it should apply to actions taken by the Deputy Director appointed by Mr. Cordray.

What is more important right now than appointing a Deputy Director is the need for the Secretary of the Treasury or his delegatee to utilize the authority granted under Section 1066 of Dodd-Frank to ratify the regulations issued by Mr. Cordray. This can certainly be accomplished without weakening the Government’s position that the Canning decision is wrong and will be overturned by the Supreme Court.