POLITICS
11/26/2017 10:47 pm ET Updated Nov 27, 2017

Top CFPB Official Sues Trump Administration As Showdown Over Agency Heats Up

Leandra English has sued the Trump administration over its appointment of Mick Mulvaney.

The deputy director of the Consumer Financial Protection Bureau sued the Trump administration on Sunday to block the president’s appointment of Mick Mulvaney as interim director of the agency.

Leandra English filed suit in U.S. District Court for the District of Columbia against President Donald Trump and Mulvaney, who currently serves as the director of the Office of Management and Budget. English was appointed deputy director of the CFPB on Friday after the agency’s director, Richard Cordray, stepped down, and says her role mandates she serve as acting director until Congress appoints Cordray’s replacement.

“As the rightful acting director of the Bureau, Ms. English brings this action against President Trump and Mr. Mulvaney seeking a declaratory judgment and, on an emergency basis, a temporary restraining order to prevent the defendants from appointing, causing the appointment of, recognizing the appointment of, or acting on the appointment of an acting director of the Consumer Financial Protection Bureau via any mechanism other than that provided for [by the law],” the suit reads.

The White House has asserted it has the authority to name its own interim director, all but assuring a tussle at the Wall Street watchdog on Monday with two separate factions contending they run the agency.

The Justice Department’s Office of Legal Counsel issued an opinion on Saturday supporting Mulvaney’s appointment.

“We think the clear legal authority is that the president does have this authority,” an administration official said in a call with reporters on Saturday. “We’ll find out based on how Ms. English decides to act at the appropriate time.”

The top lawyer at the CFPB reportedly plans to issue a memo in support of Trump’s appointment, Reuters reported on Sunday night, citing three people familiar with the document.

“It is my legal opinion that the president possesses the authority to designate an acting director for the bureau,” CFPB general counsel Mary McLeod writes in a draft of the memo, obtained by Politico.

Cordray, the agency’s first director and an Obama appointee, disagreed with the White House in an interview with The Washington Post on Saturday. He said the law gave him the authority to appoint a deputy director to lead the agency following his departure.

“My understanding of the law is that the deputy director serves as the acting director upon my resignation,” he told the outlet. “If there are disagreements about these issues, the appropriate place to settle them would be in the courts.”

The law establishing the CFPB stipulates the director of the agency shall appoint a deputy director who will “serve as acting director in the absence or unavailability of the director.” Such an individual will serve until the president appoints and the Senate confirms a new director.

Trump called leadership at the agency a “total disaster” in a tweet on Saturday, saying financial institutions had been “devastated and unable to properly serve the public.”

“We will bring it back to life!” he said.

Former Rep. Barney Frank, who helped craft the landmark Dodd-Frank Wall Street Reform act to rein in big banks following the 2008 financial crisis, slammed Mulvaney’s appointment this weekend. He pushed back against Trump’s assertions that the White House had the authority to appoint an interim director without Congressional approval, saying the CFPB was formed with an eye towards autonomy.

“We gave a lot of attention to how to structure the CFPB and how to protect its independence because its job is to go after some very powerful forces in the economy,” Frank told CNN on Saturday.

Other critics of big banks have also lambasted the White House, including Sen. Elizabeth Warren (D-Mass.), who said on Twitter that Trump was “causing chaos” with his decision.

“I agree with Rich Cordray: This needs to be decided in the courts,” Warren wrote. “If [Trump] believes he is acting legally by ignoring Dodd-Frank, he should go to court and seek a judgment right away to settle this CFPB dispute.”

Some members of the GOP disagreed. Sen. Tom Cotton (R-Ark.), a member of the Senate Banking Committee, called the CFPB a “rogue, unconstitutional agency” in a statement, and said English should be ousted for filing her lawsuit. 

“The president should fire her immediately and anyone who disobeys Director Mulvaney’s orders should also be fired,” Cotton wrote.

This article has been updated to include the CFPB general counsel’s opinion.

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