‘A dark cloud’ hangs over CFPB; lawsuit over leadership continues

The question of who will lead the Consumer Financial Protection Bureau (CFPB) is not yet resolved. Mick Mulvaney, head of the Office of Management and Budget, has been named acting director by President Trump. But former director Richard Cordray appointed chief of staff Leandra English to replace him as acting director.


Trump and Cordray each had a different law to back up their position. CFPB General Counsel Mary McLeod confirmed that Trump has the authority to appoint Mulvaney as executive director. But Sen. Elizabeth Warren (D-MA), who helped create the Consumer Financial Protection Agency, said the intent of the law was to make the agency independent of the president and to allow the director to name the acting director who would succeed him or her. Cordray’s choice, English, has sued President Trump and Mulvaney, seeking a court determination that she is the acting director.


The federal judge denied English’s motion for a temporary restraining order against Mulvaney. But the lawsuit continues and will likely end up to the DC Circuit Court of Apppeals or even the Supreme Court, according to Alan Kaplinsky, a longtime CFPB observer at law firm Ballard Spahr.


“A dark cloud looms heavily over the CFPB right now,” Kaplinsky said.


Mulvaney quickly issued a 30-day hiring freeze and a moratorium on  new regulations. In the time he is there, he is sure to take a more business-friendly approach than Cordray did. The same can be said of any permanent director Trump would nominate to replace Cordray.


Mulvaney has said he will work three days a week at OMB and three days at the CFPB. Some observers have questioned whether working in those two jobs creates a conflict, with one regulatory and the other political. Either way, part of the OMB director’s job is to negotiate a budget with Congress on behalf of the administration – an activity that will be more than a full-time job this week (see previous article).

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