WASHINGTON — A high-stakes legal clash is unfolding over President Trump’s temporary pick to run Senator Elizabeth Warren’s favorite bank regulator, and the White House is holding its ground.
Trump on Friday said he’s naming White House budget director Mick Mulvaney as temporary head of the Consumer Financial Protection Bureau. The announcement came hours after the outgoing director, Richard Cordray, said he was tapping a deputy, Leandra English, to run the agency on an acting basis, a move widely seen as an attempt to prevent the White House from naming a successor.
English on Sunday filed suit in US District Court for the District of Columbia, seeking a declaratory judgment and temporary restraining order to block Mulvaney from taking over, The Washington Post reported.
The CFPB “has been a total disaster as run by the previous Administration’s pick,’’ the president said on Twitter late Saturday. “Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!’’
It’s unclear who’ll be in charge of the consumer regulator’s more than 1,000 employees when they go to work Monday. It’s possible the dispute will play out in the courts for months until a permanent successor is named and confirmed by the Senate.
Trump’s right to make a temporary appointment was backed by the Department of Justice. A senior White House official said on Saturday that Trump is expected to decide on a permanent replacement for Cordray in the coming weeks.
Republicans are eager to start remaking the six-year-old agency, which they blame for burdening banks with unnecessary rules and have criticized as being unaccountable.
“It’s an agency that needs to be reformed,’’ Senator John Thune, Republican of South Dakota, said on “Fox News Sunday.’’ “I expect that Mick Mulvaney will be on the job and he’ll be calling the shots over there.’’
Cordray, 58, appointed by President Barack Obama, stepped down Friday. The former Ohio attorney general announced his chief of staff, English, would become deputy director and thus automatically rise to serve as acting director. But the White House said Trump has the authority to name the interim leader, using a federal vacancies law.
Mulvaney was expected to bring sweeping changes to an agency he’s called “the very worst kind of government entity.’’ He will continue to serve as director of the Office of Management and Budget.
The CFPB director is the latest source of partisan bickering over the agency. The Dodd-Frank Act says the deputy is in charge “in the absence or unavailability’’ of the director.
Democrats including Cordray and Warren, a Massachusetts Democrat credited with having helped create the CFPB, believe that means English is in charge. On the other hand, a federal vacancies law allows the president to name a temporary head of an agency when the director resigns. The White House says the Vacancies Act takes precedence.
Cordray announced on Nov. 15 that he planned to resign, amid speculation he’ll run for governor of Ohio as a Democrat. The role of deputy director had been vacant for months before Cordray named English.
“It was a little arrogant that Cordray believes he could pick his own successor,’’ said Consumer Bankers Association president Richard Hunt.
The CFPB was established after the financial crisis to police credit cards, loans, and other consumer finance products.
Warren backed English, tweeting “the Dodd-Frank Act is clear: if there is a CFPB Director vacancy, the Deputy Director becomes Acting Director . . . Donald Trump can nominate the next CFPB Director — but until that nominee is confirmed by the Senate, Leandra English is the Acting Director.’’
