Northwest Arkansas Democrat-Gazette
Judge clears way for Trump pick for bureau
Decision not to block president’s choice settles agency leadership stalemate
WASHINGTON — President Donald Trump scored a victory Tuesday when a federal judge refused to block the president’s choice to temporarily run the nation’s top consumer financial watchdog and, for the moment, ended a two-way battle for leadership of the agency.
Judge Timothy Kelly declined to stop the president from putting Mick Mulvaney in place as the acting director of the Consumer Financial Protection Bureau. In doing so, Kelly ruled against Leandra English, the bureau’s deputy director, who had requested an emergency restraining order to stop Mulvaney from becoming the acting director.
Both Mulvaney and English claimed to be the rightful acting director, with each citing different federal laws. The leadership crisis developed over the weekend after the bureau’s director, Richard Cordray, resigned and appointed English as his successor. Shortly afterward, the White House announced that Mulvaney, currently budget director, would take over the bureau on an interim basis.
The judge’s ruling Tuesday is not the final decision in the case. But in making his decision, the judge said English had not shown a substantial likelihood that she eventually would succeed on the merits of her case. The
judge’s decision is not immediately appealable.
Kelly was nominated by Trump and was confirmed by the Senate in September.
The Consumer Financial Protection Bureau was established after the financial crisis to make sure customers are not being exploited and that banks are complying with the consumer protection laws on the books. Cordray, appointed by President Barack Obama, was criticized by congressional Republicans as being overzealous but lauded by consumer advocates for aggressively going after banks for wrongdoing.
On Monday, Mulvaney said the bureau under a Trump administration would act differently than the agency under the Obama administration.
Lawyers for English will have to make a choice about how to proceed. After the hearing, a lawyer for English, Deepak Gupta, said he hopes to be able to move the case along quickly.
“I’m going to have to explore the options with my client, so I don’t know what the next step is, and I’m not going to say that right now,” he said, adding that options include asking the judge for a final decision on the merits of the case.
Gupta said it is not in his client’s interest or the government’s interest to have a “cloud of impropriety and uncertainty hanging over the bureau for any longer than is necessary.”
The White House said it
“applauds the court’s decision,” saying it provides “further support for the president’s rightful authority to designate Director Mulvaney as acting director of the CFPB.”
Trump’s authority to install Mulvaney was backed up by Mary McLeod, the bureau’s general counsel, who wrote a memo over the weekend agreeing with the White House that Mulvaney should be recognized as acting director. The Office of Legal Counsel, which acts as a legal adviser to the president, also argued that Mulvaney, not English, was the legitimate acting director of the agency.
On Tuesday morning, Mulvaney told employees to ignore orders from English while English, via a tweet from her lawyer, announced that she planned to spend the day at the bureau’s headquarters as an acting director would: meeting with agency staff members and talking with outside consumer groups.
Mulvaney, who plans to split his time between the bureau and as budget director, apologized to employees for having to tell them to disregard English’s instructions.
He didn’t reveal whether the two had crossed paths or even if they’d met. But Mulvaney did say he hoped his latest note would mean there won’t be “any more misunderstandings” about who’s in control. He also started a Twitter account identifying himself as the bureau’s director.
Late Monday, Mulvaney reiterated in a memo to staff members that while he won’t “burn the place down” he plans to run the agency much differently than Cordray did. Created by the 2010 Dodd-Frank Act, the agency is going through its first transition, which is “the nature of the world we work in,” Mulvaney wrote.
“Things are going to be different,” Mulvaney wrote Monday. “I consider the CFPB to be part of the executive branch of government. That means that it is charged with executing the laws.”
Mulvaney’s appointment to the position angered Democrats, including Sen. Elizabeth Warren of Massachusetts, who insist that the agency is independent of the president and that English is the rightful interim director. Warren joined consumer advocates Tuesday at a protest outside the bureau. She has vowed to delay Trump administration efforts to install someone atop the bureau.
“I’m here today because I believe no one should get cheated on credit cards, on mortgages, on student loans,” Warren said at the rally. “For six years, this agency has fought to give consumers a chance. Now, it is time for us to fight for the agency.”