Time is running out on Mick Mulvaney's controversial tenure as acting head of the Consumer Financial Protection Bureau, but there's an easy way for the White House to extend it: nominate somebody — anybody — else to permanently fill the job.
As it stands now, the White House budget chief must step down from his job temporarily running the bureau next month under the federal law President Trump used to install him last year in an appointment that sparked protests and a lawsuit.
But Mulvaney could stay in the position for months more — to the delight of banks and frustration of consumer advocates — if Trump simply nominates someone to be the permanent director.
Just sending the Senate a nominee triggers a provision in the Federal Vacancies Reform Act that would allow Mulvaney to serve until the Senate confirms or rejects the pick. That process could take a while.
So the Trump administration reportedly is considering tapping another federal financial regulator, J. Mark McWatters, for the CFPB job — even though his background in the credit-union industry probably would mean he would have trouble getting confirmed.
"I'm sure they want to keep Mulvaney there and they do have to nominate somebody," said Alan S. Kaplinsky, head of the consumer financial services group at law firm Ballard Spahr.
"It doesn't necessarily mean the nominee has to get confirmed," said Kaplinsky, who counsels banks on consumer financial regulatory matters.
Spokespeople for the White House and McWatters declined comment.
Mulvaney's continued presence in the job would be a slap in the face to consumer advocates who believe that he is on a mission to cripple the agency established after the financial crisis. He called the agency a "joke ... in a sad, sick kind of way" when he was a Republican House member from South Carolina.
Mulvaney has altered the bureau's mission statement to make the top priority "identifying and addressing outdated, unnecessary, or unduly burdensome regulations" and has publicly declared the agency no longer would "aggressively push the envelope" to protect consumers.
Until last month, when the CFPB joined with the Office of the Comptroller of the Currency to fine Wells Fargo & Co. $1 billion for multiple consumer abuses, the agency had not taken a single enforcement action since Mulvaney became acting director.
Mulvaney took over as acting head of the consumer bureau in late November after the resignation of Richard Cordray, a Democrat appointed by President Obama to be its very first leader.
Just before he departed, Cordray promoted Leandra English, his chief of staff, to deputy director and said she would be the acting director under a provision of the 2010 Dodd-Frank act that created the bureau.
But within hours of Cordray's resignation announcement, Trump appointed Mulvaney to fill the post under the vacancies act. The administration said that the 1998 law allowed Trump to appoint an official who already had been confirmed by the Senate in another capacity to also serve as the bureau's acting director.
English went to court seeking to be declared the lawful acting director. Her request for a preliminary injunction was denied, and she has appealed.
A CFPB spokesman had no comment on Mulvaney's status. But Mulvaney has said publicly he expected to be the bureau's acting director for a while.
"I tell folks that the way that Senate is working, we're just sort of assuming that I'm going to be there for the rest of this calendar year," he said at a meeting of the Independent Community Bankers of America in Washington in April, according to a transcript provided by the bureau.
The only way that could happen is for Trump to nominate a permanent director. Otherwise, Mulvaney has told lawmakers that his 210 days would expire June 22.
The nonpartisan Congressional Research Service in a report last year on temporarily filling Senate-confirmed positions found that the time restriction is suspended and the acting officer can continue to serve "if a first or second nomination for the position has been submitted to the Senate for confirmation and is pending."
The law allows for an additional 210 days of service after a nomination is rejected or withdrawn, but limits the extension to the first two, the report said. There also are tighter time limits if the acting director was the nominee to serve permanently.
But don't expect Mulvaney, who's been criticized for not working full time at his budget director post, to be the permanent director. It's not something he has expressed interest in, and he would have a difficult time getting confirmed by the Senate.
"So if the … nomination is on a Thursday and the confirmation is on Friday, I've got a day's notice, and I'm gone," he told the bankers group in April about the vacancies law. "Conversely, if it takes a year and a half to confirm that person, then I'm stuck there for a year and a half. So we don't know how long that's going to take."
Speculation has focused on McWatters, the chairman of the National Credit Union Administration and a former aide to Rep. Jeb Hensarling (R-Texas), also a vociferous critic of the CFPB.
But there's a longstanding rift between banks and credit unions because of the special tax treatment credit unions receive — unlike banks, they are exempt from federal income taxes. The head of a leading banking industry trade group, the Independent Community Bankers of America, came out publicly in January against a potential McWatters nomination.
McWatters also could run into problems after a report this month that he mostly does his credit union regulatory job from his home in Texas.
The result could be a stalled nomination in the narrowly divided Senate — a frequent occurrence during the Trump administration — that allows Mulvaney to keep serving as acting CFPB director under the vacancies law.
Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group, said McWatters or any other nominee could serve as a straw man to extend Mulvaney's tenure beyond the 210 days allowed by the law.
"If the goal is simply to extend the combined reign of terror and error of Mick Mulvaney, [McWatters] is as good a choice as anybody," Mierzwinski said.
"They could nominate Mickey Mouse if their total goal is simply to extend Mick Mulvaney."
There's another advantage to Republicans keeping Mulvaney in the temporary job as long as possible: delaying the start of the next permanent director's five-year term.
The Dodd-Frank law says that the bureau's director can be removed by the president only for cause, not at will. So delaying the start of the next director's term until 2019 or later would mean that if Democrats win the White House in the 2020 election, the next president would have little if any chance to replace Trump's choice for the job.
Sen. Sherrod Brown (D-Ohio), a strong supporter of the consumer bureau, wants Trump to send a nominee to the Senate soon.
"The president should quickly nominate a director with a track record of strong consumer advocacy who can be confirmed by the Senate with strong bipartisan support," Brown said in a statement Monday.
Kaplinsky said he hopes Trump nominates a permanent director who "has a good chance of being confirmed" so financial firms don't have to continue dealing with the uncertainty of an interim CFPB chief.
"While I think in general the banking industry is happy with Mulvaney, they recognize he's not going to be in there forever, and there's concern about whether the new person who ultimately becomes the director will continue the policies of the acting director, which the industry likes so far," he said.
But even if the White House can't find someone who could get easily confirmed, Kaplinsky said he expects a nominee by June 22.
"I think it's very likely Trump will nominate somebody by that date," Kaplinksy said, "otherwise Mulvaney is out."