Two Acting Directors Show Up for Work Monday at CFPB

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Summary: The Consumer Financial Protection Bureau found itself with two acting directors vying for command over the agency Monday morning.

There may have been a little confusion over who was in charge at the Consumer Financial Protection Bureau today. On Friday, President Donald Trump appointed Mick Mulvaney as the acting director of the CFPB until a permanent director could be appointed. Former Director Richard Cordray also appointed a temporary leader when he resigned. Both acting directors showed up Monday ready to take the lead of the CFPB.

  

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Cordray’s pick, Leandra English, sent out an email Monday morning to the CFPB’s 1600 employees, welcoming them back from the Thanksgiving break. Mulvaney showed up to the office with doughnuts for the employees at the consumer watchdog agency. Soon after English’s email went out, Mulvaney sent out a correction email stating he was in charge.

Mulvaney has long been an opponent to the CFPB. As a congressman, he tried to dismantle the agency created to control the financial industry that taxpayers had to bail out several years ago for $700 billion. Republicans argue that the agency creates too much red tape and restrictions on banks. Trump is also an opponent of the agency, promising to defang or abolish the CFPB during his presidential campaign.

Mulvaney’s response email to staff members read, “Please disregard any instructions you receive from Ms. English in her presumed capacity as Acting Director. If you receive additional communications from her today, please inform the General Counsel.”

English filed a lawsuit against the Trump administration late Sunday night, trying to stop the appointment of Mulvaney to the acting director position. CFPB general counsel Mary McLeod told the agency’s legal division that she agreed with the U.S. Justice Department over who had the authority to appoint an acting director. English’s lawsuit puts a federal court into the position of ultimately deciding who can hold the temporary position while the Senate picks a permanent successor.

Cordray, the first director of the agency, was left over from the Obama administration. He abruptly resigned and put his chief of staff, English, in charge. Just hours after, Trump made his move to put his own man in charge. It may take months for the Senate to make their selection.

The CFPB was created in 2011 in response to the financial crisis beginning in 2007. The agency is supposed to protect consumers from deceptive and predatory mortgage and lending practices. During his time as the director, Cordray gained a reputation for making aggressive rules on things like payday loans while issuing multimillion-dollar fines against institutions like Wells Fargo & Co.

The assumption is that with Mulvaney acting as the director, the agency’s work will come to a standstill. Trump wants to toss many of Obama’s financial regulations, putting his own acting director in place will be the best way to start the reversal of those regulations.

English argues that Dodd-Frank allows the deputy director to take over when the agency’s director departs. The Justice Department counters that the 1998 Federal Vacancies Reform Act gives the president power to appoint a temporary director.

Who do you think the employees will turn to and respect? Share your thoughts with us in the comments below.

To learn more about the Consumer Financial Protection Bureau, read these articles:

• U.S. Consumer Financial Protection Bureau Sues Georgia Law Firm
• New Mortgage Rules Announced by Consumer Financial Protection Bureau
• Richard Horn Leaves Consumer Financial Protection Bureau to Join Dentons

Photo: flickr.com