Consumer agency’s path unclear after resignation
Financial advocacy group to face leadership fight
The simmering battle for control of the U. S. Consumer Financial Protection Bureau exploded over the Thanksgiving holiday weekend amid clashing leadership succession strategies by the Trump administration and the watchdog’s newly departed director.
The moves left the consumer bureau with competing appointees named as its acting director and appeared to set the stage for an expanded struggle — and potential court fight — over the future of an agency widely criticized by the financial industry and Washington conservatives but lauded by consumer advocates.
Richard Cordray, the Obama appointee who served as the bureau’s first director, launched the new battle late Friday by formalizing his previously announced plan to step down. In a letter to President Trump, Cordray highlighted the bureau’s record of returning nearly $ 12 billion to consumers “cheated or mistreated by banks or other large financial companies.”
While Cordray’s letter to Trump said his resignation would take effect at midnight Friday, it said nothing about a succession plan.
However, in a separate email to staffers, Cordray announced that he had reassigned Leandra English, the agency’s chief of staff, as deputy director. Under the Dodd- Frank Wall Street reform act that created the bureau in the wake of the national financial crisis, the appointment would make English the new acting director, Cordray wrote.
The move “would minimize operational disruption and provide for a smooth transition given her operational expertise,” Cordray wrote.
Left unsaid was that the eleventhhour installation of English seemed aimed at blocking Trump from gaining control over the consumer agency until he nominated a successor and the nominee won Senate confirmation — a process that could take months.
Knowing that, Trump moved later Friday to circumvent Cordray’s succession plan. The White House announced that Mick Mulvaney, director of the Office of Management and Budget, would simultaneously serve as acting director of the consumer bureau “until a permanent director is nominated and confirmed.”
“The President looks forward to seeing Director Mulvaney take a common sense approach to leading the CFPB’s dedicated staff, an approach that will empower consumers to make their own financial decisions and facilitate investment in our communities,” the announcement said.
The dueling appointments left it unclear who would be in charge of the agency come Monday morning.
White House officials said Saturday that Trump’s naming of Mulvaney as acting director had been vetted and given verbal approval by the Department of Justice.
However, Cordray disagreed, telling The Washington Post: “My under-
“It is, to me, sir, one of the most offensive concepts, I think, in a representative government, which is almost completely unaccountable government bureaucracy.” Mick Mulvaney Speaking of the Consumer Financial Protection Bureau, of which President Trump has named him the acting director
standing of the law is that the deputy director serves as the acting director upon my resignation. If there are disagreements about these issues, the appropriate place to settle them would be in the courts.”
Sen. Elizabeth Warren, D- Mass., who helped shepherd the creation of the consumer bureau, backed Cordray’s position in a series of Saturday tweets.
Alan Kaplinsky, leader of the Ballard Spahr LLP law firm’s consumer financial services group, tweeted agreement about the need for court review. But he also signaled that Trump should prevail.
Trump signaled confidence in his position during a Saturday evening tweet in which he said his administration would bring the “total disaster” of a consumer bureau “back to life.”
Mulvaney, a Republican who previously represented South Carolina in the U. S. House, is expected to chart a more restrained oversight role. He referred to the agency as a “sad, sick joke” when asked about it during his January confirmation hearing. “It is, to me, sir, one of the most offensive concepts, I think, in a representative government, which is almost completely unaccountable government bureaucracy,” he responded to questions from Sen. Jeff Merkley, D- Ore.