Cordray's successor sues Trump administration over Mulvaney's appointment to CFPB

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While the atmosphere at the CFPB may seem like routine Washington theatrics, which person will run this agency for the coming days, weeks or possibly months will have a real impact on banks and other financial companies and their customers.

In a lawsuit filed Sunday night, Ms. English asked the U.S. District Court for the District of Columbia for a temporary restraining order preventing Mr. Mulvaney from taking control of the bureau.

Rep. Maxine Waters of California, the top Democrat on the Financial Services Committee, issued a statement Saturday calling Mulvaney "unacceptable" to lead the CFPB because of his "noxious" views toward its mission to protect consumers.

Under the law, the appointment should also make English the the agency's acting director, though the White House says that Mulvaney plans to show up at the CFSB Monday morning anyway. Mulvaney, and likely any Trump appointee, is certain to roll back the bureau's aggressive stance and be more accommodating to banks and other financial companies.

English was promoted to chief of staff to deputy director by Richard Cordray as he prepared to resign last Friday.

The Trump administration defended its position in a court brief filed late Monday.

It said that both the Justice Department's Office of Legal Counsel and the general counsel of the CFPB "agree that the President of the United States lawfully designated John M. Mulvaney as the CFPB's Acting Director pursuant to the VRA (Vacancies Reform Act)".

In a statement, Representative Tom Cotton of Arkansas, a frequent defender of the president, called the CFPB a "rogue, unconstitutional agency", and said that Trump should "fire [English] immediately and anyone who disobeys Director Mulvaney's orders should also be fired summarily". Judge Kelly did not make any ruling on the case at an initial hearing Monday, saying he wanted to wait to hear the government's argument before issuing any ruling. Cordray was appointed to the position by President Barack Obama and has been long criticized by congressional Republicans as overzealous. The Trump administration is focused on rolling back Obama-era financial rules.

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Mulvaney once characterized the consumer protection bureau as a "sad, sick joke", as notes the New York Times, and he was widely expected to try and unwind Cordray's legacy.

But the official said Cordray's move to appoint a successor indicates "that he is trying to provoke" such a legal battle.

"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 these issues, the appropriate place to settle them would be in the courts".

The Daily Caller News Foundation reported Sunday that English is an acolyte of Democratic Sen. Elizabeth Warren (D-Mass.), who said on Twitter that Trump was "causing chaos" with his decision.

Meanwhile Mulvaney quickly responded to English's email, instructing CFPB staff to "disregard" any directions from her.

"The common objections that you hear in these various blog posts online is that, 'Oh, the CFPB statue said the CFPB deputy director shall serve as the director", one White House official said, according to The Hill. In this case, the OLC argues that a law called the Federal Vacancies Reform Act (FVRA) allows the president to appoint a new acting director to positions that require senate confirmation.

That's a violation the Dodd-Frank Act of 2010, English argues. CFPB General Counsel Mary McLeod said in the November 25 memo that she had advised all bureau personnel to "act consistently with the understanding" that Mulvaney is in charge. When Republicans blocked Warren, Obama nominated Richard Cordray, who was later confirmed by the Senate mostly along party lines votes from Democrats.

The CFPB, passed in the wake of the mortgage meltdown and financial crisis, was as given a broad mandate to be a watchdog for consumers when they deal with banks and credit card, student loan and mortgage companies, as well as debt collectors and payday lenders.

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