Trump Tells CFPB Director Chopra, “You’re Fired!”: What Happens Next?

It’s official.  President Trump has fired CFPB Director Chopra.  Former Director Chopra published a letter that he wrote to President Trump, dated February 1, 2025, in which Chopra confirmed that his term has concluded.  President Trump has appointed Treasury Secretary Scott Bessent as Acting Director.  The CFPB’s press release is here. But is this the end of the story?

Under the Dodd-Frank Act, the Deputy Director “shall…serve as acting Director in the absence or unavailability of the Director.”  12 U.S.C. § 5491(b)(5)(B).  This seems pretty simple: the Deputy Director becomes Acting Director, right?  Well, as we learned during the first Trump administration when President Trump appointed Mick Mulvaney as Acting Director of the Bureau, it is a bit more complicated.  Another federal statute, the Federal Vacancies Reform Act of 1998 (FVRA), dictates what can happen in the absence of an agency head (which I wrote about here).  The FVRA provides that if an officer “dies, resigns, or is otherwise unable to perform the functions and duties of the office,” then “the first assistant to the office of such officer shall perform the functions and duties of the office temporarily in an acting capacity.”  5 U.S.C. § 3345(a).  But the FVRA also authorizes the President to appoint someone who has already been confirmed by the Senate to assume the role, or a different employee of the agency (if they meet certain conditions), in an acting capacity.  Id.  Therefore, there appears to be a conflict between the mandate that the Deputy Director “shall” be Acting Director, and the FVRA’s authority for the President to install someone else.

But Does the FVRA Definitely Apply to the CFPB?

There was litigation regarding this issue during the first Trump administration, after former Director Cordray resigned from the CFPB in 2017.  Cordray stated in his announcement that, under the Dodd-Frank Act, Deputy Director Leandra English was Acting Director upon his resignation.  But President Trump appointed Mick Mulvaney as Acting Director under the authority of the FVRA.  Then English and the Trump administration fought over who was the valid CFPB Director (which I wrote about here).  President Trump ultimately won the litigation in 2018, when the federal District Court in DC in English v. Trump denied a motion for a preliminary injunction filed by English seeking to block the appointment of Mulvaney.  English did not pursue an appeal of that District Court decision.

There are two main arguments English asserted against the FVRA applying to the CFPB.  First, the FVRA provides that its authority is the “exclusive means for temporarily authorizing an acting official to perform the functions and duties” of a Presidentially-appointed and Senate confirmed position in an executive agency.  5 U.S.C. § 3347(a).  But the FVRA provides an exception to its exclusivity if another statute “expressly…designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity.”  Id.  The Dodd-Frank Act, as noted above, states that the Deputy Director becomes the Acting Director in the event the Director becomes unavailable or absent, which does sound like it qualifies for this exception.  This could potentially be interpreted to mean that the FVRA does not apply to the CFPB.  One important counterargument to this is that it is merely an exception to “exclusivity,” and the FVRA applies to the CFPB as an alternative statute, meaning President Trump is still lawfully authorized to appoint an acting director who would displace the Deputy Director.  The District Court in English v. Trump adopted this latter viewpoint and held that, even if not the exclusive means, the FVRA remains an available means of appointing an Acting Director of the CFPB.  However, this interpretation would turn the “shall” in the Dodd-Frank Act provision into a “may,” and for this and other reasons, some legal scholars disagree with this interpretation.

Second, the FVRA excludes a Senate-confirmed member of any board, commission, or similar entity that “governs an independent establishment or Government corporation.”  5 U.S.C. § 3349c(1)(B).  The CFPB Director is by statute a member of the FDIC board (which is a board of a government corporation).  See 12 U.S.C. § 1812(a)(1).  In addition, the Acting Director of the CFPB automatically serves on the FDIC board in the event of the absence of the CFPB Director.  12 U.S.C. § 1812(d)(2).  One could argue that, for these reasons, the exclusion under the FVRA is satisfied.  However, the District Court in English v. Trump held that this exclusion did not apply to the CFPB because it only applies to FDIC board members who are appointed by the President and Senate-confirmed.  The CFPB Director only serves on the FDIC board ex officio by operation of statute.

Conclusion

Keep in mind that the FVRA litigation with respect to the CFPB never got to an appeals court.  And past courts in other FVRA cases have not addressed these exact questions. In addition, some legal scholars have found English’s arguments in the prior litigation to be compelling.  I won’t get into the weeds of these and other potential arguments here (I’d be happy to do so offline).  And I’m not saying the Democrats should or will litigate this issue. My main point is that there is still the potential for litigation on this issue, depending on the appetite and desire of Democrats to engage in a lengthy fight to try and keep hold of the CFPB (or at least ruffle the Trump administration’s feathers).  Though because of the previous district court opinion and other FVRA opinions, it may be an uphill battle. But there may be a number of political benefits to such litigation, and at this point, one cannot say it would definitely lose. It would certainly be interesting to watch (maybe not so much for the CFPB staff!).

Stay tuned.

Please reach out to me at rich@garrishorn.com if you have any questions or if you would like to discuss.