Last week, the Consumer Financial Protection Bureau (CFPB) Director, Richard Corday, appointed David Silberman as the new Acting Deputy Director of the CFPB. Silberman will replace Meredith Fuchs, who previously served as both Acting Deputy Director and General Counsel. Silberman currently serves as Associate Director for Research, Markets, and Regulations, a position he has held since 2011. According to the CFPB, he will retain that position while a search for his replacement is conducted. Because Silberman is being promoted from within the CFPB, his appointment is not expected to change the direction of the CFPB or affect its agenda.
Silberman’s appointment is, nonetheless, noteworthy because he is being appointed to the second most powerful position at the CFPB without the advice and consent of the U.S. Senate. The position of Deputy Director is a statutory position created by the Dodd-Frank Act. In the event of the Director’s absence or vacancy, the Deputy Director shall serve as Acting Director by operation of law. By statute, the CFPB Director has the sole authority to appoint the Deputy Director – free and clear of any oversight by Congress.
This process is an outlier when compared to the appointment process for similarly ranked positions in the federal government. Generally, an appointment of this significance would require the advice and consent of the Senate in most other federal agencies and departments. Since the creation of the CFPB, financial services industry leaders have raised concerns about CFPB’s lack of congressional oversight, including its appointment process. Some are renewing calls for reforms in response to Silberman’s appointment.
Richard Hunt, President and CEO of the Consumer Bankers Association, has said that “concentrating the CFPB’s authority in the hands of one person—particularly if this person is not Senate confirmed, as in the case of an acting director—threatens the very foundation of the agency as an objective, neutral regulator. A bipartisan commission would better safeguard internal deliberation and constrain the CFPB’s ability to make politically motivated or ill-informed decisions, including the de facto appointment of an unconfirmed director.” Absent reforms to the appointment process, the Deputy Director will continue to be appointed and serve at sole discretion of Director.