Trump Nominates OMB Official to Head CFPB, Critics See an Attempt to Bypass Federal Vacancy Law
In a strategic move that has raised eyebrows among critics, President Trump has nominated Stuart Levenbach, an official from the Office of Management and Budget (OMB), for the position of director of the Consumer Financial Protection Bureau (CFPB). Critics argue that this move is primarily aimed at allowing Acting CFPB Director Russell Vought to continue leading the agency, despite impending restrictions under the Federal Vacancy Reform Act.
Stuart Levenbach: A Placeholder Nominee?
Observers are skeptical about Levenbach’s nomination, viewing it as a means to keep Vought at the helm of the CFPB. Vought, who also heads the OMB, has been working with Levenbach since February. The Acting Director recently made a controversial statement, predicting that the CFPB will be shut down by the end of the year due to funding issues. According to Vought, the agency is not eligible to seek funding from the Federal Reserve, a claim that could potentially lead to the bureau’s closure.
Controversial Tactics and Legal Loopholes
This nomination and the dispute over CFPB funding are seen by experts as part of a larger political and legal battle by the Trump administration to dismantle the CFPB. The Federal Vacancies Reform Act allows Vought to potentially extend his term as the acting director for more than a year. The law typically limits the tenure of agency directors to 210 days, but this period can be extended if another person is nominated for the permanent position. By nominating Levenbach, Vought secures at least another 210 days at the helm while the Senate considers the nomination. Should the nominee be rejected or withdrawn, a new 210-day period begins.
Despite Levenbach’s nomination, a confirmation hearing date has not been scheduled. Many experts believe Republicans will delay the nomination process, enabling Vought to implement his policy objectives at the CFPB.
Reactions to the Nomination
Sen. Elizabeth Warren, D-Mass., a key figure on the Senate Banking Committee, has criticized Vought’s tactics. She described the nomination as a front for Vought to remain as Acting Director indefinitely as he attempts to “illegally close down the agency.” She accused Trump and Vought of prioritizing corporate interests over consumers.
Adam Rust, director of financial services for the Consumer Federation of America, echoed these sentiments, accusing Vought of exploiting a loophole in the Vacancy Act to proceed with his plan to dismantle the agency.
Levenbach’s Career and Controversies
Levenbach has a long history in government service. He served as chief of staff at the National Oceanic and Atmospheric Administration during the first Trump administration. His tenure was marked by controversy as he faced criticism from scientists for attempting to tone down the conclusions of the National Climate Assessment, a congressionally-mandated climate report.
CFPB’s Uncertain Future
The CFPB’s future appears uncertain following a recent opinion issued by the Department of Justice’s Office of Legal Counsel. The opinion states that the CFPB cannot legally request funding from the Federal Reserve System. This has left the CFPB’s future in limbo after December 31. Without appropriations from Congress, the CFPB would technically cease to function.
The CFPB’s union has also sued Vought, claiming he planned to fire up to 90% of the bureau’s employees. Although an appeals court ruled in August that the layoffs were legal, this ruling is now being appealed.
Vought has further stirred the pot by notifying Congress that the CFPB only has enough money to continue operating through Dec. 31. He cited the Office of Legal Council’s opinion about the CFPB funding as the reason why the agency may be forced to lay off employees.
As this situation continues to unfold, the fate of the CFPB hangs in the balance, leaving consumers and industry observers waiting anxiously to see what the future holds for this critical watchdog organization.
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