WASHINGTON – White House budget director Mick Mulvaney says he has ordered a 30-day suspension on regulations and a hiring freeze at the Consumer Financial Protection Bureau amid a contentious legal showdown over whether he has the authority to lead the federal government’s top consumer financial watchdog agency.
While serving in Congress, Mulvaney blasted the Consumer Financial Protection Bureau, or CFPB, as a regulatory scourge on the economy. He said the bureau, created in 2010 by the Democratic-controlled Congress to operate independently of oversight, issues unduly harsh regulations and that he was in favor of eliminating it.
But he declared the CFPB will be run differently under the Trump administration than it had been under former President Obama.
“Anybody who thinks that a Trump administration at the Consumer Financial Protection Bureau will be the same as an Obama administration’s CFPB is simply being naïve,” Mulvaney said at a Monday news conference.
— Fox News (@FoxNews) November 27, 2017
He continued: “Rumors that I’m going to set the place on fire or blow it up or lock the doors are completely false. I’m a member of the executive branch of government. We intend to execute the laws of the United States, including the provisions of Dodd-Frank that govern the CFPB.”
There will be no payments from the civil penalties fund for at least 30 days, he added, but the department will still adhere to statutory and legal deadlines in that time period.
Mulvaney, President Donald Trump’s appointee to lead the bureau, and Leandra English, the woman tapped by CFPB former director Robert Cordray, both showed up to work Monday. Both claimed they are the lawful acting directors of the entity. Cordray named English to the position when he resigned Friday.
The CFPB was established after passage of the Dodd Frank Act, which placed major regulations on the financial industry in the aftermath of the financial crisis.
Thank President Trump for all his accomplishments during his first year in office. Send him a FREE card of your choice. Go to ThankTrump.us
Sen. Elizabeth Warren, D-Mass., then a Harvard law professor, proposed establishment of the bureau in 2007. In an effort to bypass Republican opposition to Warren during the confirmation process, President Obama appointed Cordray, the former attorney general of Ohio, to lead the agency.
Republicans blocked Cordray’s confirmation to lead the agency for two years, but he was finally confirmed by the Senate in July 2013.
Congress gave the agency broad authority and autonomy to protect it from political interference. The bureau’s director serves a five-year term.
GOP lawmakers have since called for abolishment of the CFPB, arguing it creates regulatory blockades for small businesses and ushered in a new era of expansive federal overreach.
The standoff between the White House and the consumer agency began Friday after Cordray abruptly resigned eight months before his tenure was scheduled to end.
It’s widely believed that Cordray appointed English as the agency’s new acting director eight hours after he resigned in an effort to prevent Trump from appointing his own selection to the post. During his presidency, Trump has sought to loosen the federal government’s grip on businesses.
Mulvaney said Monday that he would keep his current job as director of the Office of Management and Budget. He also said he plans to spend three days a week at the CFPB and three days a week at his job at OMB, assuming the additional role until a permanent successor is confirmed, a process that could take months.
But English, who joined the CFPB when it was first established and served most recently as its chief of staff, contends she is the “rightful acting director.” She filed a lawsuit against the Trump administration in the U.S. District Court for the District of Columbia Sunday evening. English is seeking a temporary injunction to block Trump’s appointment of Mulvaney.
She also asked the court for an emergency restraining order to prevent Trump from naming an interim leader for the agency and to declare her as the agency’s acting director.
Attorneys representing English argue in their court filing that she is entitled to the position under the Dodd-Frank Wall Street reform law, which created the agency and specifies the deputy director becomes acting head when the agency’s top spot is vacant.
“The president’s attempt to install a White House official at the head of independent agency – while allowing that officer to simultaneously serve in the White House – is unprecedented,” said English’s lawyer, Deepak Gupta of the law firm Gupta Wessler, in a statement Sunday. “The law is clear: Ms. English is acting director of the Consumer Financial Protection Bureau until the Senate confirms a new director.”
But the Trump administration maintains that Mulvaney has legal standing and cited the Federal Vacancies Reform Act. The White House defended its decision Sunday evening.
“The administration is aware of the suit filed this evening by Deputy Director English. However the law is clear: Director Mulvaney is the acting director of the CFPB,” said White House Press Secretary Sarah Sanders in a statement. “Now that the CFPB’s own general counsel – who was hired under Richard Cordray – has notified the bureau’s leadership that she agrees with the administration’s and DOJ’s reading of the law, there should be no question that Director Mulvaney is the acting director.”
In response to English’s suit, Sanders said “the law is clear.”
“It is unfortunate that Mr. Cordray decided to put his political ambition above the interests of consumers with this stunt,” she said in a written statement. “Director Mulvaney will bring a more serious and professional approach to running the CFPB.”
While the court will decide which law takes precedence, the consumer bureau’s own lawyer is backing the White House selection.
The Justice Department’s Office of Legal Counsel outlined the legal grounds for Mulvaney’s appointment under the Vacancies Reform Act in an eight-page opinion published Saturday.
“I advise all bureau personnel to act consistently with the understanding that Director Mulvaney is the acting director of the C.F.P.B.,” the bureau’s general counsel, Mary E. McLeod, wrote in a memo to the agency’s senior staff.
Both Mulvaney and English showed up to work Monday morning and greeted the CFBP staff with conflicting emails announcing themselves as “acting director.”
English thanked the staff for their service in an email. Mulvaney brought doughnuts for the staff and directed them to disregard English’s instructions and inform the agency’s general counsel of any communications from her related to bureau duties.
Mulvaney’s communications director tweeted a photo of his boss “hard at work” in his new position.
— john czwartacki (@CZ) November 27, 2017