Four prominent law firms courted at least one top-level official at the Consumer Financial Protection Bureau this summer as the legal industry anticipated the Obama-era regulatory agency’s upcoming transition to new leadership under the Trump administration, according to ethics disclosures obtained by The National Law Journal.
Between June and July, the firms Sidley Austin, Ballard Spahr, Goodwin Procter and Manatt, Phelps & Phillips each requested meetings with one or more CFPB officials, the records show. The meeting requests were reported to the agency’s ethics official as part of a notification process for certain executive branch employees.
The notifications, required under federal law for any substantial discussion of post-government employment, included a recusal statement in which the CFPB official indicated he or she would not participate in matters that involved the identified law firm. The name of the CFPB official was redacted in each of the disclosures, which were provided to the NLJ through a Freedom of Information Act request.
Partners at each of the four law firms either declined to comment on their recruiting efforts or did not respond to interview requests. The records characterize the separate meetings with the four law firms as either “discussions” or “negotiations.” The documents cover a period from March to mid-September.
It is possible the four disclosures do not relate to the same CFPB official. But two of the firms identified—Ballard Spahr and Goodwin Procter—are widely thought to be interested in the agency’s outgoing enforcement chief, Anthony Alexis, a CFPB lawyer since 2012.
Alexis’ planned departure from the agency has for months been among the worst-kept secrets in the CFPB orbit. A former U.S. Justice Department prosecutor and Mayer Brown partner, Alexis announced his departure plans to to staff earlier this month, and he plans to stay at the agency until his successor is chosen. He wasn’t reached for comment Wednesday.
“I don’t discuss and we don’t discuss personnel issues,” said Alan Kaplinsky, co-chairman of the consumer financial services group at Ballard Spahr, which has a sizable CFPB-focused practice. Kaplinsky writes regularly for the firm’s Consumer Finance Monitor blog, which spotlights—and often criticizes—CFPB activity.
The CFPB, born from the Dodd-Frank financial reform law and responsible for billions of dollars in recoveries from mortgage companies and other financial players, is fast-approaching a pivotal moment. Long in the crosshairs of congressional Republicans and the financial industry, the agency and its rules are under attack in the courts and on Capitol Hill.
Senate Republicans late Tuesday narrowly voted to nullify a CFPB rule that would have bolstered the power of consumers to sue banks in court.
The five-year term of the agency’s director, Richard Cordray, expires in July, although he may resign early to pursue his rumored interest in the Ohio governor’s race. Regardless of whether Cordray, a former Ohio attorney general and treasurer, serves out of the remainder of his term, the Trump administration will have an opportunity to appoint a new leader.
Trump’s surprise victory put a damper on interest in hiring out of the CFPB, as firms expected the bureau to throttle down its enforcement efforts and braced for Democratic state attorneys general to pick up any slack.
“Rabid recruiting of CFPB folks is pretty much over. Occasionally you see things, but nobody’s coming to us and saying that’s an area we want to grow in, which was not the case a year-plus ago,” said Steve Nelson, a headhunter at The McCormick Group, a law and government affairs firm based in Arlington, Virginia. “It was a whole different world, even in 2016, because everyone thought Democrats would stay in the White House at that point.”
In August, former CFPB enforcement attorney Jonathan Engel joined Davis Wright Tremaine as a partner. This month, former CFPB attorney Gerry Sachs left Paul Hastings to join Venable, where he will be a partner alongside Allyson Baker, another veteran of the bureau’s enforcement team.
Earlier this year, former CFPB enforcement lawyer Yiris Cornwall left to become a senior counsel at Wells Fargo. The San Francisco-based bank in September paid a $100 million civil penalty to resolve the agency’s allegations related to the bank’s sales practices scandal.
In the early years of the bureau’s existence, firms and companies recruited CFPB attorneys, in part, to build their understanding of how to work and communicate with the new agency.
But that hiring frenzy has “subsided to a more normal state now just due to the passage of time and because so many people have hired out of the CFPB,” said Goodwin Procter partner Michael Flynn, chairman of the firm’s banking and consumer financial services practice, who declined to comment on hiring efforts.
“There’s less hiring for the sake of hiring now and much more focus on the individual. That’s the take I’m seeing on it now,” Flynn said. Still, he added: “As we would with any of the major federal agencies, if the right resume came across our desk, we’d certainly look at it.”