- The Washington Times - Sunday, November 26, 2017

The Consumer Financial Protection Bureau will begin work Monday with two people claiming to be chief of the Wall Street policing agency, in what is shaping up as the latest battle between President Trump and the anti-Trump resistance.

Mr. Trump named Office of Management and Budget Director Mick Mulvaney on Friday to be the acting director of the bureau while keeping his OMB job, and by late Sunday night matters had spread to the courts.

The president was moving to counter Richard Cordray, the outgoing CFPB director with a decidedly anti-Trump bent who on Friday afternoon announced a deputy director, Leandra English. Mr. Cordray then sped up his retirement to Friday night, which he said made Ms. English the acting director of the agency before Mr. Mulvaney could set foot in the door.

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.

Mr. Mulvaney showed up at the CFPB offices in Washington shortly after 7:30 a.m. Monday carrying an icebreaker of sorts — a large brown shopping bag of Dunkin’ Donuts.

Sen. Elizabeth Warren, Massachusetts Democrat and a key player in the dispute, had warned that the question of who controls the CFPB will likely end up in court.

Trump has put a cloud of uncertainty over the @CFPB by attempting to override Dodd-Frank,” she tweeted earlier Sunday. “Mulvaney should take no action until this dispute is decided in the courts.”

The Trump administration had no immediate reaction Sunday night, but a senior administration official earlier said Mr. Mulvaney will show up for work Monday morning at the CFPB, the agency with about 1,000 employees that was set up by the Dodd-Frank financial regulation law to police Wall Street in the wake of the 2008 financial collapse.

The White House insists it has the upper hand, saying the Justice Department’s office of legal counsel — the government’s internal legal advice branch — has said the president has the power to name an acting director under the federal Vacancies Act.

“We believe this action is consistent with that long-established practice,” a senior official said Saturday.

Administration officials said they expect Ms. English will fill her role of deputy director and won’t try to usurp the acting director’s role from Mr. Mulvaney.

Mr. Trump traded barbs over the weekend with Ms. Warren, who has championed an activist CFPB, over the agency’s performance and who should lead it. The president said that under the Obama administration, the CFPB left financial institutions “devastated and unable to properly serve the public.”

Ms. Warren replied on Twitter, “Less than a decade after taxpayers bailed out the big banks, the banking industry made record profits last year. That’s who you’re worried about, @RealDonaldTrump?”

“The only thing that will turn the CFPB into a disaster is for @RealDonaldTrump to ignore Dodd-Frank & name an acting director determined to destroy the agency,” she said.

Ms. English served in the Obama White House’s OMB before becoming chief of staff at the CFPB this year. She is seen by the banking community as an acolyte of Ms. Warren, who was eyeing the director’s job earlier this decade.

Mr. Mulvaney, while serving in the House, referred to the CFPB as “the very worst kind of government entity.”

Lawmakers on Sunday were divided along party lines over who should control the agency.

“I expect that Mick Mulvaney will be on the job and he’ll be calling the shots over there,” Sen. John Thune, South Dakota Republican, said on “Fox News Sunday.” He said the Senate will process a permanent nominee rapidly after Mr. Trump names one.

Sen. Lindsey Graham, South Carolina Republican, said he believes “the president’s on good ground here to appoint somebody under the vacancy statute.”

“I hope it’s Mick Mulvaney, and I hope he will ride herd on these folks,” Mr. Graham said on CNN’s “State of the Union” with Jake Tapper. “It’s the most out-of-control, unaccountable federal agency in Washington, really no oversight at all. They can get into everybody’s business. I don’t think they add much at all to consumer protection. They sure add a lot to increasing costs for midsize banks throughout the country that had nothing to do with the financial collapse.”

But Sen. Richard J. Durbin, Illinois Democrat, said the Dodd-Frank law spells out that the CFPB’s deputy director “shall” be in charge when the director steps down.

“So now there’s an effort by Mick Mulvaney and the attorney general to really push him into this position so that he can take away their power,” Mr. Durbin said on CNN. “It’s a watchdog agency. Wall Street hates it like the devil hates holy water. And they’re trying to put an end to it with Mr. Mulvaney stepping into Cordray’s spot. But the statute is specific, it’s clear, and it says that the deputy shall take over.”

In her lawsuit filed Sunday night, Ms. English argued similarly, saying the federal vacancy law doesn’t apply if another later statute sets out a different process for a board’s succession.

The White House said Mr. Trump “looks forward to seeing Director Mulvaney take a common-sense approach to leading the CFPB’s dedicated staff, an approach that will empower consumers to make their own financial decisions and facilitate investment in our communities.” It said in a statement that Mr. Mulvaney will serve as acting director until a permanent director is nominated and confirmed.

The complicated set of moves underscores the stakes in the job of the director of the CFPB.

Republicans vehemently oppose the scope of the panel’s powers and call it anti-business. Democrats cheer its role, saying the agency needs unprecedented independence so it can constrain businesses that otherwise would escape punishment.

A federal court has ruled the agency’s structure unconstitutional, saying it puts too much power in the hands of one unelected bureaucrat. Ms. Warren and other Democrats in Congress originally envisioned the CFPB to be run by a commission, but in the end the law created a powerful director’s post for the agency.

The financial industry said the episode exposes deep problems within the CFPB. Consumer Bankers Association President Richard Hunt called the board “a dictatorship, period.”

“Conflicting attempts to name a successor at the CFPB creates further chaos for consumers and the banking industry,” Mr. Hunt said.

He said the fight should be a wake-up call to Congress and the White House to rewrite the structure of the CFPB to make sure one person doesn’t have so much power.

Under the Vacancies Act, an acting director can lead the agency until a permanent head is confirmed by the Senate or until a 210-day deadline.

When the agency was set up, Republicans made clear that they would reject Ms. Warren for the director’s post, so President Obama instead named Mr. Cordray in a recess appointment, in a move the Supreme Court later deemed in a parallel case to be unconstitutional. The Senate eventually confirmed him anyway.

Ms. Warren would go on to be elected to the Senate from Massachusetts. She defended her acolyte Friday and challenged Mr. Mulvaney’s right to the acting director’s job.

“@realDonaldTrump can nominate the next @CFPB Director — but until that nominee is confirmed by the Senate, Leandra English is the Acting Director under the Dodd-Frank Act,” the senator wrote on Twitter.

But conservative advocates said the law supports Mr. Trump.

“President Trump is the only person allowed to name the new head of the Consumer Financial Protection Bureau,” said Rick Manning, president of Americans for Limited Government. “Any attempt to circumvent that authority by Cordray runs counter to the fundamental principles of American governance.”


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