Small CU takes on Trump
Lower East Side People’s FCU takes on the president over leadership of CFPB.
LOWER EAST SIDE PEOPLE’S FEDERAL Credit Union has filed a lawsuit against President Donald Trump and Mick Mulvaney over what the CU sees as a violation of the constitution in Mulvaney’s appointment to head up the Consumer Financial Protecion Bureau.
For the $55 million credit union, “it is plain that [CFPB Deputy Director] Leandra English is the only lawful acting director in charge of the CFPB,” according to the lawsuit that was filed in federal court in Manhattan.
The suit argues that the Doddfrank Act requires that English should remain acting director until the president nominates and the Senate confirms a new director.
“We support the CFPB as a protector of our low-income members’ financial rights, and fear that the appointment of an acting director beholden to the White House could result in upheaval and ultimate dissolution of this critical agency,” said the credit union’s CEO, Linda Levy, in a press release. “Having experienced the devastation that the 2008 mortgage crisis wreaked on our low-income members, we need
the CFPB to protect communities targeted by financial predators.”
The small Manhattan-based credit union’s suit argues that Trump’s appointment has thrown financial institutions “into a state of regulatory chaos.”
Meanwhile, both CU trade groups have already recognized Mulvaney over English as acting director.
“While Lower East Side People’s Federal Credit Union is not a member of NAFCU, we were surprised to see the lawsuit,” said Dan Berger, president and CEO of NAFCU, in a statement. “Since the CFPB’S inception, NAFCU has worked with the bureau to ensure credit unions’ needs are heard. We look forward to continuing to reduce unnecessary regulatory burdens on credit unions, including regulation promulgated by the CFPB, as we outlined in a letter to interim Director Mulvaney [recently].”
The credit union has 8,500 members and serves low-income, immigrant and other underserved communities.
JOINING THE FRAY
While it is the only credit union to file suit on this matter, it is hardly alone. English is also suing the president over his appointment of Mulvaney. Former lawmakers Barney Frank and Chris Dodd, who drafted the Dodd-frank Act, teamed up to say that the CFPB’S deputy director should serve as the agency’s acting director.
“This is a naked, illegal power grab by Donald Trump to destroy an agency that helps and protects millions of ordinary Americans,” said Ilann M. Maazel, a partner at ECBA, and lead counsel for Lower East Side People’s Credit Union, in the release. “The law requires Leandra English to be CFPB’S Acting Director.”
A bevy of states attorneys general, led by New York’s Eric Schneiderman, have also sounded off on the issue, saying that past statements by Mulvaney about the Bureau should disqualify him from leading the agency.
“We are very concerned by the widely reported statements that your choice for acting director of the agency, Mick Mulvaney, has made about the role of the agency, calling it ‘a joke…in a sick, sad kind of way,’ and ‘an awful example of a bureaucracy that has gone wrong,’” the AGS said in a recent letter. “Such statements about an agency that has helped millions of American consumers and achieved fundamental reform in a number of critically important areas of American commerce are categorically false, and should disqualify Mr. Mulvaney from leading the agency, even on an acting basis.”
The letter is the latest attempt by Democrats to undermine Mulvaney, who reports directly to Trump as head of OMB but was tapped to also lead the independent agency despite his repeated criticisms of it.
If Mulvaney tries to stop the CFPB’S staff from pursuing fraud and abuse, Schneiderman said state attorneys general will step up to the plate.
“If incoming CFPB leadership prevents the agency’s professional staff from aggressively pursuing consumer abuse and financial misconduct, we will redouble our efforts at the state level to root out such misconduct and hold those responsible to account,” the AGS’ letter stated.
President Trump is facing another lawsuit over his appointment of Mick Mulvaney to head up the Consumer Financial Protection Bureau, this one from a small credit union in Manhattan.