×

Two fight for control of US consumer watchdog

  • Mick Mulvaney, center, returns to the Consumer Financial Protection Bureau in Washington, Monday afternoon, Nov. 27, 2017.  AP Photo/Jacquelyn Martin

  • Sally Greenberg, with the National Consumers League, right, holds a sign that says "Defend CFPB" outside of the Consumer Financial Protection Bureau in Washington, Monday, Nov. 27, 2017, during a news conference with consumer groups that oppose Mick Mulvaney being named acting director for the bureau. AP Photo/Jacquelyn Martin

  • In this March 26, 2015, photo, Consumer Financial Protection Bureau Director Richard Cordray speaks during a panel discussion in Richmond, Va. Cordray, the first director of the Consumer Financial Protection Bureau, tendered his resignation Friday, Nov. 24, 2017, and simultaneously named his own successor, setting up the consumer agency for another battle with the Trump White House over control of the powerful federal watchdog. AP Photo/Steve Helber

  • Mike Litt, left, Kaitlyn Vitez, and Ruth Susswein, gather with other members of consumer advocate groups to protest outside of the Consumer Financial Protection Bureau in Washington, Monday, Nov. 27, 2017, during a news conference with consumer groups that oppose Mick Mulvaney being named acting director for the bureau. AP Photo/Jacquelyn Martin

  • Mick Mulvaney, center, walks to the Eisenhower Executive Office Building after leaving the Consumer Financial Protection Bureau in Washington, Monday morning, Nov. 27, 2017. (AP Photo/Jacquelyn Martin) Jacquelyn Martin



Associated Press
Monday, November 27, 2017

WASHINGTON — With emails, tweets and doughnuts, dueling acting directors battled for control of the Consumer Financial Protection Bureau on Monday.

Leandra English, who was elevated to interim director of the bureau last week by its outgoing director, sent staff an email offering Thanksgiving wishes. President Donald Trump’s choice for the role — White House budget director Mick Mulvaney — then emailed staff to tell them to “disregard” any instructions from English.

Laying down markers in what has quickly become a war of optics, both signed their missives “Acting Director.”

English has asked a judge to issue a temporary restraining order to block Mulvaney from taking over the bureau. She cited the Dodd-Frank Act, which created the Consumer Financial Protection Bureau. 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.

English was promoted to chief of staff to deputy director by Richard Cordray as he prepared to resign last Friday. Cordray was appointed to the position by President Barack Obama and has been long criticized by congressional Republicans as overzealous. He was one of the last Obama-era holdouts.

Mulvaney, a former Republican congressman from South Carolina, has called the agency a “joke” and an example of bureaucracy run amok. He is expected to be critical of the bureau’s previous work and will likely push to dismantle some of the agency’s previous actions.

Cordray said Monday that the issue should be settled by a court.

“The law says that I shall appoint the deputy director, and I did so,” he said. “My understanding of the law is that the deputy director becomes the acting director upon my departure. If there are disagreements about those issues, then they should be settled in the courts.”

Mulvaney arrived Monday morning at the agency with doughnuts, and his staff tweeted out photos of him meeting with agency division heads. Meanwhile, English sent a department-wide email saying she hoped everyone had a great Thanksgiving and signed it “Acting Director.” English also plans to have meetings on Capitol Hill, including with Sen. Elizabeth Warren, D-Mass.

Mulvaney quickly responded to English’s email, saying to “disregard” any directions from her.

At the center of the controversy are two laws: the Dodd-Frank Act, the law passed after the financial crisis that created the bureau, and the Federal Vacancies Reform Act, which gives the president authority to appoint temporary department heads while their permanent nominees are approved by the Senate.

While the Vacancies Act does allow a president to appoint acting directors at agencies like the CFPB, the Dodd-Frank Act has specific language that seems to indicate that only a deputy director can step into the acting director position. English was elevated to the deputy director position shortly before Cordray resigned.

English’s push to be recognized as the legitimate acting director took a blow Monday after a memo was released from Mary McLeod, the CFPB’s general counsel, saying she agreed 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 director of the department.

One straightforward solution to the issue of who is in charge at the CFPB is for Trump to nominate his own permanent director. But it may take several weeks for someone to be nominated and even months until the Senate were to confirm his or her appointment.

Until the issue of who is in charge is cleared up, any actions taken by the CFPB are likely to come under legal scrutiny from the banks, credit card and other financial companies that the agency oversees. No fines are likely to be imposed or new regulations written.

___

Sweet reported from New York. Julie Carr Smyth contributed from in Columbus, Ohio