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Battle for Control of Consumer Agency Heads to Court Battle for Control of Consumer Agency Heads to Court
(about 1 hour later)
The leadership standoff between President Trump and the Consumer Financial Protection Bureau, an independent government agency, is headed to court. The battle over who will lead the federal government’s top consumer financial watchdog agency is now headed to court.
Leandra English, the bureau’s deputy director, filed a lawsuit on Sunday night to block Mr. Trump’s choice of a temporary chief from taking control of the agency on Monday morning. The extraordinary fight, which unfolded on Sunday night, intensifies the uncertainty over the fate of the Consumer Financial Protection Bureau, a regulator created in the aftermath of the global financial crisis of nearly a decade ago. It encapsulates dueling visions of how the American financial system could be regulated, as President Trump moves to loosen regulation created under the Obama administration to rein in the financial industry.
Ms. English, an agency veteran, was appointed to the deputy director position on Friday by the consumer bureau’s outgoing director, Richard Cordray, who abruptly resigned that day. Under the terms of the law that created the agency, Ms. English should succeed him as its temporary leader, Mr. Cordray told the staff. Leandra English, the deputy director of the bureau, filed a lawsuit late Sunday night to block President Trump’s choice of a temporary chief from taking control of the agency on Monday morning.
But Mr. Trump, citing a different federal law, moved hours later to install his budget director, Mick Mulvaney, as the agency’s acting director. The bureau had been a “total disaster” and needed new leadership to “bring it back to life,” Mr. Trump said on Twitter. Mr. Trump has been seeking to install his budget director, Mick Mulvaney, as the agency’s acting director. The bureau had been a “total disaster” and needed new leadership to “bring it back to life,” Mr. Trump has said on Twitter.
The dueling appointments left it unclear who would be running the agency on Monday. At stake is the immediate future of the consumer bureau — one of the last holdouts, within the federal government, against President Trump’s efforts to strip away business regulations. While Mr. Trump can appoint his own director, confirmation could take months and could slow down Republican efforts to defang the agency.
The agency was created six years ago to oversee a wide variety of financial products, including mortgages, credit cards, bank accounts and student loans.
Under Mr. Cordray’s leadership, the bureau aggressively used its powers to develop new rules and punish companies that broke existing ones. It targeted abusive debt collectors and moved to bolster protections for mortgage borrowers. Under Mr. Cordray, it won nearly $12 billion in refunds and canceled debts for 29 million consumers.
But that put it in the cross hairs of industry critics and many Republicans, who accused it of overreaching.
“Wall Street hates it like the devil hates holy water,” Senator Dick Durbin, an Illinois Democrat, told CNN on Sunday.
Republicans have argued that the agency under Mr. Cordray has held back growth and innovation. They have criticized how he ran the agency in dozens of appearances on Capitol Hill.
To protect the agency from political interference, Congress gave it unusual independence and autonomy. The consumer bureau’s leader, who serves a five-year term, is one of the few federal officials who cannot be fired at will by the president.
The current standoff was triggered by the resignation of its outgoing director, Richard Cordray, who abruptly stepped down on Friday. His departure came eight months before his term was scheduled to end.
Ms. English, an agency veteran, was appointed to the deputy director position hours later. In a letter, Mr. Cordray said that that appointment would make her the agency’s acting director under the terms of the law that created the agency.
But Mr. Trump is citing a different federal law in his effort to appoint Mr. Mulvaney. The dueling appointments left it unclear who would be running the agency on Monday.
Ms. English is looking to the United States District Court for the District of Columbia to resolve the dispute. The lawsuit she filed seeks a temporary injunction to halt Mr. Mulvaney’s appointment.Ms. English is looking to the United States District Court for the District of Columbia to resolve the dispute. The lawsuit she filed seeks a temporary injunction to halt Mr. Mulvaney’s appointment.
“The President’s attempt to appoint a still-serving White House staffer to displace the acting head of an independent agency is contrary to the overall statutory design and independence of the bureau,” Ms. English wrote in her lawsuit.“The President’s attempt to appoint a still-serving White House staffer to displace the acting head of an independent agency is contrary to the overall statutory design and independence of the bureau,” Ms. English wrote in her lawsuit.
The White House and the consumer bureau did not respond to a request for comment.
Ms. English asked the court for an emergency restraining order to prevent Mr. Trump from naming an interim leader for the agency. She also asked it to declare that she, not Mr. Mulvaney, is the agency’s acting director.
The dispute has elevated Ms. English to a national spotlight. Before her appointment, she was a low-profile career civil servant who joined the agency in its infancy and rose steadily through its ranks, serving most recently as its chief of staff. She holds degrees from New York University and the London School of Economics, and previously held senior positions at the Office of Personnel Management and the Office of Management and Budget.