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US consumer agency's acting director takes Trump to court over Mulvaney pick US consumer agency's acting director sues Trump as CFPB dispute heats up
(35 minutes later)
The government official Donald Trump wants to pass over as acting director of the Consumer Financial Protection Bureau (CFPB) with his own budget chief is asking a federal court to block the president’s appointment.The government official Donald Trump wants to pass over as acting director of the Consumer Financial Protection Bureau (CFPB) with his own budget chief is asking a federal court to block the president’s appointment.
Leandra English, who was elevated to the position of interim director of the CFPB by its outgoing director, filed a lawsuit Sunday night in the US district court for the District of Columbia. She asks for a declaratory judgment and a temporary restraining order to block White House budget director Mick Mulvaney from taking over the bureau. Leandra English was promoted to interim director of the CFPB by its outgoing director, Richard Cordray, on Friday. On Monday, she and Trump’s counter-appointee, director of the Office of Management and Budget Mick Mulvaney, were technically due to start in their roles on the same day.
English cited the Dodd-Frank Act, which created the CFPB. She said that as deputy director, she became the acting director under the law and argued that the federal law the White House contends supports Trump’s appointment of Mulvaney doesn’t apply when another statute designates a successor. The White House and congressional Republicans expressed confidence in the president’s authority to override the CFPB pick, based on a 1998 federal law.
English was chief of staff to bureau director Richard Cordray when he named her deputy director as he prepared to resign on Friday. Cordray was appointed to the position by Barack Obama and has been long criticized by congressional Republicans as over-zealous. But English filed a lawsuit Sunday night in the US district court for the District of Columbia, in which she asked for a declaratory judgment and a temporary restraining order to block Mulvaney from taking over the bureau.
Mulvaney, a former congressman and founder of the hard-right House Freedom Caucus, has called the agency a “joke” and an example of bureaucracy run amok. He is expected to dismantle much of what the bureau has done. English cited the Dodd-Frank Act, which created the CFPB, and said that as deputy director she became the acting director under the law. Her case argues that the federal law the White House contends supports Trump’s appointment doesn’t apply when another statute designates a successor.
The CFPB was created by the Obama administration in the aftermath of the 2008 financial crash. One of the driving forces behind it was Elizabeth Warren, then a Harvard professor and now a Massachusetts senator and, in many eyes, a potential presidential candidate in 2020.
Barney Frank, the retired Massachusetts Democrat who was one of the authors of the law that created the CFPB, told CNN on Monday morning that Trump and Republicans were seeking to weaken the agency in an administrative fashion, rather than legislative – because it was popular for its work standing up to banks, mortgage companies, loan companies and debt collectors on behalf of ordinary Americans.
The CPFB, he said, was “fighting the big interests on the battlefield every day”.
The appointment of the White House budget director to another job at a time when tax cut legislation and a possible government shutdown are looming, Frank said, showed Trump was not serious about running the CFPB properly.
“This isn’t something you can run in your lunch hour – even if you were in favour of it,” he said.
English was chief of staff to Cordray, who was appointed to the position by Barack Obama. Cordray has been long criticized by congressional Republicans for being over-zealous in cases such as that of Wells Fargo, a bank the CFPB fined a record $185m over its creation of false accounts to boost sales figures.
In a 2014 interview Mulvaney, a former congressman and founder of the hard-right House Freedom Caucus, called the agency a “joke in a sick, sad kind of way” and an example of bureaucracy run amok. He is expected to dismantle much of what the bureau has done.
Wall Street hates the CFPB like the devil hates holy water. And they’re trying to put an end to it with MulvaneyWall Street hates the CFPB like the devil hates holy water. And they’re trying to put an end to it with Mulvaney
The White House, with the support of an opinion issued on Saturday by the Justice Department’s Office of Legal Counsel, maintained that the president has the power to appoint an acting director. Steven A Engel, newly confirmed head of the office, wrote that, while the deputy director may serve as acting director under the statute, the president still has authority under the Vacancies Reform Act. The White House maintains that the president has the power to appoint an acting director. Steven A Engel, newly confirmed head of the justice department’s Office of Legal Counsel, wrote a confirming opinion citing the 1998 Vacancies Reform Act.
A new director must be confirmed by the Senate. Earlier on Sunday, Senator John Thune of South Dakota, the third-ranking GOP leader, pledged swift action whenever Trump nominates a successor to Cordray. Thune said he expected that Mulvaney “will be on the job and he’ll be calling the shots over there” but acknowledged the issue could end up in court. A permanent director must be confirmed by the Senate, a process which can take months. On Sunday, Senator John Thune of South Dakota, the third-ranking GOP leader, pledged swift action but told Fox News Sunday he expected Mulvaney “will be on the job and he’ll be calling the shots over there”.
Beyond the fight over who’s in charge is the future direction of the bureau, created after the 2008 financial crisis and given a broad mandate as a watchdog for consumers when they deal with banks and credit card, student loan and mortgage companies, as well as debt collectors and payday lenders.
“All Americans should be deeply concerned about the White House’s cynical decision to flout the law and attempt to put the ringleader of its dangerous, anti-consumer protection policies in charge,” House Democratic leader Nancy Pelosi of California said in a statement issued before the lawsuit was filed.“All Americans should be deeply concerned about the White House’s cynical decision to flout the law and attempt to put the ringleader of its dangerous, anti-consumer protection policies in charge,” House Democratic leader Nancy Pelosi of California said in a statement issued before the lawsuit was filed.
Taking aim at Mulvaney, Pelosi said the public deserves “a champion that protects them from predatory bankers and lenders, not the leadership of a Wall Street pawn who denigrates consumer protection as a ‘sick, sad joke.”’ Pelosi said the public deserved “a champion that protects them from predatory bankers and lenders, not the leadership of a Wall Street pawn who denigrates consumer protection as a ‘sick, sad joke.”’
Senate Democratic leader Chuck Schumer joined Pelosi in arguing that English was the rightful acting director. He accused Trump of ignoring the law “in order to put a fox in charge of a hen house”. Senate Democratic leader Chuck Schumer accused Trump of ignoring the law “in order to put a fox in charge of a hen-house”.
Thune said he hoped eventually to see “reforms to that agency, which has essentially very little accountability to the Congress or anybody else”. Another Republican, Senator Lindsey Graham of South Carolina, said he thinks Trump is on “good ground” to pick Mulvaney for the job and hopes Mulvaney “will ride herd on these folks”. Thune said he hoped to see “reforms to that agency, which has essentially very little accountability to the Congress or anybody else”. Another Republican, Senator Lindsey Graham of South Carolina, told CNN he thought Trump is on “good ground” to pick Mulvaney for the job and hopes Mulvaney “will ride herd on these folks”.
Senator Dick Durbin of Illinois, the No2 Democrat in the Senate, said putting Mulvaney in charge was part of an effort to destroy the bureau. Frank countered on Monday that the CFPB was designed to be independent of Congress, like “every bank-regulating agency [that] has some autonomy” in order to keep “political interference to a minimum”.
“Wall Street hates it like the devil hates holy water,” Durbin said. “And they’re trying to put an end to it with … Mulvaney stepping into Cordray’s spot. But the statute is specific, it’s clear, and it says that the deputy shall take over.” He added that Republicans who say the CPFB is out of control were unable to cite specific cases in which it has behaved badly.
Thune appeared on Fox News Sunday while Durbin and Graham spoke on CNN’s State of the Union. On CNN on Sunday, Senator Dick Durbin of Illinois, the No 2 Democrat in the Senate, described his party’s support for the CPFB – and its popular appeal – in colourful terms.
“Wall Street hates it like the devil hates holy water,” Durbin said. “And they’re trying to put an end to it.”