The fight for control of the Consumer Financial Protection Bureau.
Trump’s pick for consumer watchdog bureau orders freeze on hiring and rule-making
By Renae Merle November 27 at 4:30 PM
[VIDEO] 2:15 The battle for control of the Consumer Financial Protection Bureau. The White House and the Consumer Financial Protection Bureau are in a standoff over who will become its acting director: Leandra English or Mick Mulvaney. (Jenny Starrs/The Washington Post)
White House budget director Mick Mulvaney said he ordered a 30-day hiring freeze and a delay of rule-making and other actions at the Consumer Financial Protection Bureau on his first day as boss of the consumer watchdog.
Whether he remains in charge that long remains unclear. A day earlier, the agency’s chief of staff Leandra English filed suit claiming she is the “rightful acting director” in the wake of former director Richard Cordray’s departure.
Both sides are pointing to the fine print in dueling federal statutes to claim authority over the job running one of the most controversial, and powerful, banking industry regulators. English filed suit late Sunday, asking for a temporary restraining order to prevent Trump from appointing Mulvaney acting director. U.S. District Judge Timothy Kelly, one of two newly confirmed Trump appointees on the D.C. court, took up the case Monday but rendered no decision.
Mulvaney and English even sent out dueling email messages to CFPB’s likely befuddled 1,600 employees. English said in her message, “I hope that everyone had a great Thanksgiving. With Thanksgiving in mind, I wanted to take a moment to share my gratitude to all of you for your service.” English ended the note with her claimed title: “Acting Director.”
Shortly after, Mulvaney, already in the director’s office, according to photos taken by his staff, responded with his own email.
“It has come to my attention that Ms. English has reached out to many of you this morning via email in an attempt to exercise certain duties of the Acting Director. This is unfortunate but, in the atmosphere of the day, probably not unexpected,” he said.
“Please disregard any instructions you receive from Ms. English in her presumed capacity as acting director.” Mulvaney also asked CFPB employees to report any additional professional communications from English to the general counsel’s office.
“I apologize for this being the very first thing you hear from me. However, under the circumstances I suppose it is necessary. If you’re at 1700 G Street today, please stop by the fourth floor to say hello and grab a doughnut.”
The battle for control of the agency threatens to slow down the Trump administration’s efforts to roll back financial regulations. While Trump has installed new leadership at the top of several other regulatory agencies, many of which have already taken a more business-friendly tone, the CFPB has continued to aggressively push rules that irked Wall Street. The agency has broad powers to regulate financial firms, from banks, credit card companies to payday lenders, and impose fines for wrongdoing.
“The agency has been an effective cop on the beat and the banks don’t want an effective cop on the beat,” said Sen. Elizabeth Warren (D-Mass.) after she and Sen. Charles E. Schumer met with English on Capitol Hill for less than a half an hour.
Schumer, the senate minority leader, said Trump had nominated a series of people devoted to terminate the agencies they were nominated to run. Mulvaney, he said, was “only the latest in a line of Trojan horse candidates .”
Schumer said he remembered that the Senate inserted language on succession at the CFPB that had been missing from the House version in order to “shield it” from lobbyists. “We purposely put that in in order to avoid putting a fox in charge of the henhouse.”
In a briefing with reporters, Mulvaney said he ordered a freeze on actions to help him get a handle on the bureau’s activities. He said he would spend three days a week working at the CFPB and three days a OMB.
He said President Trump told him he wants the budget director to fix the agency so that it “protects people without trampling on capitalism.” Mulvaney argued the agency has hampered lending with its tough rulemaking, which he said is not accountable to Congress.
“Elections have consequences for every agency,” he said, referring to Trump’s victory in November.
[VIDEO:] 1:19 Mulvaney says there's 'no change' in his criticism of the CFPB Mick Mulvaney, President Trump's choice for acting director of the Consumer Financial Protection Bureau, reiterated his criticism of the bureau on Nov. 27. (Reuters)
Mulvaney did not back down from his comments in a 2014 video interview with the Credit Union Times ..
.. when he complained that it could be difficult even to have the CFPB return a phone call. “The place is a wonderful example of how a bureaucracy will function if it has no accountability to anybody.”
The agency is a “joke .?.?. in a sick, sad way,” he said at the time.
In the meantime, the legal limbo could threaten the validity of any decisions made by Mulvaney or English in the coming days, legal experts have said.
“People are being investigated by the CFPB all the time,” said Alan Kaplinsky, head of the Consumer Financial Services Group for law firm Ballard Spahr. But any firm thinking about settling with the agency now faces a significant question, he said. “Are you settling it with Mulvaney? Are you settling it with English?”
“It’s going to create absolute chaos. You are not going to be able to settle anything,” he said.
Spencer S. Hsu, Steven Mufson and Thomas Heath contributed to this report.
The Washington Post wants to talk to CFPB employees about the news today. To contact a reporter, please email renae.merle@washpost.com, or reach out via Twitter or Signal.
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