Rival bosses fight to lead consumer watchdog
Trump pick, Obama holdover claim control in chaotic day at work
WASHINGTON — On Monday, Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, brought in doughnuts. Around the same time, Leandra English, the agency’s other acting director, sent an all-staff email thanking employees for their service. Awkward. And so it goes in a capital city defined by its dysfunction, at an agency where two public servants, one a holdover from the Obama administration and another a rushed temporary appointee by President Donald Trump, are messily and publicly vying to lead a controversial agency under constant political assault by Republicans.
Ties between the Trump White House and the federal government’s top consumer financial watchdog agency were so frayed by the end of Thanksgiving weekend that hundreds of confused employees came to work not knowing who their director would be.
The bureaucratic roller coaster began with the abrupt departure Friday of Richard Cordray, an Obama appointee who helped the agency aggressively expand its powers to punish rule-breaking companies. He named English as his acting deputy director and presumed acting director. The White House responded forcefully by saying Mulvaney, currently director of the Office of Management and Budget, would be the one in control until Trump decided on a permanent successor, whose confirmation could take months.
On Sunday evening, English filed a lawsuit against Trump in an attempt to block him from appointing Mulvaney, who is named in the lawsuit as “claiming to be acting director” of the agency.
As confusion reigned, English headed to Capitol Hill to meet with at least four lawmakers about her plans. Among those lawmakers: Sen. Chuck Schumer, the Democratic leader from New York, and Sen. Elizabeth Warren, D-Mass., who proposed the bureau and helped set it up, according to a spokeswoman for Warren.
Mulvaney dodged questions from consumer finance advocates as he carried in breakfast for at least a few employees on the 1,600-person payroll. There was no public trace of English, whose tenure as a low-profile public servant abruptly ended as she began to fight on behalf of the agency she helped found in 2011. Mulvaney has been openly critical of the agency, once calling it a “joke” and a “wonderful example of how a bureaucracy will function if it has no accountability to anybody.”
The two dueling directors embody widely differing visions regarding the future of the agency, which was established under the 2010 Dodd-Frank Act and adopted an aggressive agenda under the Obama administration, targeting financial companies for practices that it considers unfair or abusive.
Those actions have resulted in nearly 30 million consumers collecting almost $12 billion in refunds and canceled debts.
Barney Frank, a former representative from Massachusetts who was a co-sponsor of the Dodd-Frank Act, said that the law intended for the acting director to step into any vacancy, to protect the agency from political influence.
“Bank regulation is a very sensitive business,” Frank said in an interview Monday. “You don’t want to expose the agency doing it to the normal political interference, which is what we were afraid of.”
Republicans have long said the agency has overreached. Trump publicly offered his thoughts on the agency’s performance over the weekend: “The Consumer Financial Protection Bureau, or CFPB, has been a total disaster as run by the previous Administrations pick,” he wrote on Twitter on Saturday. “Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!”
Sarah Huckabee Sanders, the White House press secretary, commented on the disarray: “It is unfortunate that Mr. Cordray decided to put his political ambition above the interests of consumers with this stunt,” she said in a statement. “Director Mulvaney will bring a more serious and professional approach to running the CFPB.”
Sanders also cited a memo sent by Mary McLeod, the consumer bureau’s general counsel, who said she had found an opinion by the Justice Department’s Office of Legal Counsel written Saturday in support of Mulvaney’s appointment under the Vacancies Reform Act “on point and persuasive.”
“I advise all bureau personnel to act consistently with the understanding that Director Mulvaney is the acting director of the CFPB,” McLeod wrote.
Still, the bureaucratic pingpong continued on Monday as the morning progressed. Mulvaney sent a memo to employees, asking them to “please disregard any instructions you receive from Ms. English in her presumed capacity as Acting Director.”
“If you receive additional communications from her today in any form, related in any way to the function of her actual or presumed official duties (i.e. not personal), please inform the General Counsel.”
He also instructed staff to say hello and grab a doughnut. On Monday, inquiries from journalists who contacted the agency’s spokeswoman were referred to Mulvaney’s spokesman, which suggested employees were heeding his requests.
In her own email, sent to the entire staff about a half-hour after Mulvaney arrived for work, English expressed her gratitude: “It is an honor to work with all of you,” she wrote.
They both signed off as acting director.