WASHINGTON — The leadership of the Consumer Financial Protection Bureau may soon be in play again as President Trump is reportedly weighing whether to pick a new White House chief of staff.

At the top of his shortlist is Mick Mulvaney, who currently pulls double duty as head of the Office of Management and Budget and the acting director of the Consumer Financial Protection Bureau. If Mulvaney were to get the nod from Trump, he would likely need to give up control of both agencies.

While Mulvaney downplayed these reports on Friday, the speculation has left many wondering what the administration would do with the CFPB if Mulvaney got promoted.

Acting CFPB Director Mick Mulvaney, also head of OMB (Office of Management and Budget)
Acting CFPB Director Mick Mulvaney dismissed speculation Friday that he could be named as President Trump's chief of staff. Bloomberg News

Following is a guide to the possibilities:

Trump picks another Senate-confirmed acting director

Trump has two ways to pick an acting director. The first, via the Federal Vacancies Reform Act, allows him to pick anyone who is already confirmed by the Senate, while Trump’s permanent nominee, Kathy Kraninger, is vetted by the Senate. That statute is what Trump used to install Mulvaney in the first place.

That gives Trump flexibility for who to pick as a temporary steward, including recently-confirmed heads of other banking regulators, such as Comptroller Joseph Otting and Federal Deposit Insurance Corp. Chair Jelena McWilliams.

“Who would that be?” said Isaac Boltansky, director of policy research at Compass Point Research & Trading. “Would it be the head of the OCC?”

But Trump could also look to other parts of the government, including Treasury Secretary Steven Mnuchin, whose name was bandied about last year before Mulvaney was selected. Some observers see that as unlikely, however, given the other priorities, such as trade, in which Mnuchin is already involved. But Trump could pick from other confirmed posts in that department.

“Mnuchin’s name has been floated before,” said Benjamin Olson, a partner at Buckley Sandler. “It would not have to be the head of an agency. It would have to be someone who has been through the Senate confirmation process. There are deputy treasury secretaries, there are other officials.”

Trump designates Kraninger as acting head of CFPB

The second way Trump could name an acting director is to wait for a Congressional recess and install Kraninger as director immediately.

Such a move would enable her to serve as CFPB director for a year while her nomination as director is pending. President Barack Obama did this when he made a recess appointment for Richard Cordray before his Senate confirmation.

But the maneuver carries risk and could actually hurt Kraninger’s chances of getting confirmed by the Senate as the permanent director.

“Once you have a track record, generally senators don’t like recess appointments,” said Brandon Barford, a policy analyst at Beacon Policy Advisors. “If this confirmation is not popular to begin with, because she doesn’t have a financial services background … more likely is that the things that she does as she seeks to put her stamp on the bureau end up” making policymakers angry.

Kraninger is scheduled to appear in front of the Senate Banking Committee on July 19, where Democrats will likely probe her role at OMB in setting Trump’s immigration policy, particularly the separation of migrant children from their parents.

Then there is a the question of whether and when the Senate will be in recess. Senate Majority Leader Mitch McConnell has indicated that he will cancel the August recess in order to deal with legislative priorities.

Brian Gardner, a policy analyst at KBW, said it’s more likely that Trump would appoint a second acting director, rather than giving Kraninger a recess appointment.

“A second acting director would make more sense,” Gardner said. “A recess appointment is probably unlikely. Republicans don’t like them and the Senate is not going to be in recess anytime soon. As of now the Senate is going to be in session for much of August.”

Trump moves Mulvaney but doesn’t immediately appoint a new director

This is the least likely option, in part because it would leave Deputy Director Leandra English, who has sued Trump and Mulvaney claiming she is the rightful acting director, in charge.

In the improbable event that Trump does not name an acting director, control of the agency automatically falls to English. Under the Dodd-Frank Act, the deputy director becomes acting director in the absence of a CFPB chief. When Cordray left, he tried to install English as acting director, citing Dodd-Frank, but courts have ruled that Trump acted within his rights in appointing someone under the Federal Vacancies Reform Act.

Trump keeps Mulvaney where he is now

Mulvaney himself has suggested that speculation over his becoming chief of staff is unfounded.

“I’ve heard those same rumors about three times now in the last 12 months,” Mulvaney said Friday on Fox Business. “I’ll start dealing with that issue when the president actually raises it with me, as opposed to the media, and that hasn’t happened yet.”

Trump may keep John Kelly, his current chief of staff, in place or name a different replacement.

That would leave Mulvaney in charge until Kraninger is confirmed or a court rules he cannot legally hold the acting director job, an issue still pending because of English’s lawsuit.

Neil Haggerty

Neil Haggerty is the Congress reporter for American Banker. He previously was a financial regulation reporter at MLex Market Insight.