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CFPB Leadership Unclear Following Cordray’s Departure

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WASHINGTON — White House officials said anonymously Saturday that President Donald Trump was on solid legal ground in appointing Mick Mulvaney acting director of the Consumer Financial Protection Bureau despite the departing chief’s last-minute designation of a new deputy to temporarily run the agency.

The competing claims to the bureau’s temporary leadership — until a permanent director is nominated and confirmed by the Senate — could put the controversial consumer watchdog agency in legal turmoil.

Senior administration officials, speaking on condition of anonymity, said Saturday that Mulvaney’s appointment was consistent with the Federal Vacancies Reform Act of 1998 and they hoped to avoid a court fight.

The appointment also was cleared by the Justice Department’s Office of Legal Counsel, which will release an opinion soon, the officials said.

Trump Friday night named Mulvaney, the director of the White House Office of Management and Budget, as the bureau’s acting director in after the resignation of its first chief, Richard Cordray.

Earlier Friday, Cordray wrote to Trump saying his resignation would be effective at midnight. Cordray also appointed his chief of staff, Leandra English, to be deputy director.

The Dodd-Frank Wall Street Reform and Consumer Protection Act, which created the bureau in 2010, says the deputy director becomes the acting head “in the absence or unavailability of the director.” In an email to bureau staff, Cordray said English would take over as acting director.

But senior administration officials said the 1998 vacancies act gives Trump the power to instead install an official who already has been confirmed by the Senate to be the acting director.

Mulvaney was confirmed by the Senate to lead OMB and will remain in that job while he is acting director of the consumer bureau, senior administration officials said.

“I believe Americans deserve a CFPB that seeks to protect them while ensuring free and fair markets for all consumers,” Mulvaney said in a written statement. “Financial services are the engine of American democratic capitalism, and we need to let it work.”

Mulvaney has been a vocal critic of bureau, which most Republicans oppose. He has called it a “sick, sad joke,” with lending rules that are “absolutely absurd.”

Lauren Saunders, associate director of the National Consumer Law Center, said Trump’s appointment of Mulvaney was unlawful.

“In an attempt to install a wrecking ball at the helm of the consumer watchdog, President Trump has ignored the law that dictates that the consumer bureau’s deputy director takes over until Congress can confirm a new director,” she said.

“The law is designed to protect the consumer bureau’s independence and to make sure that the qualifications and biases of a new director are examined through the regular confirmation and hearing process,” Saunders said.
The dispute could be headed for court. Senior administration officials said that would be determined by English, who must decide whether she will assert that she is the acting director or defer to Mulvaney.

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