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State House News Service
Katie Lannan



By Katie Lannan

STATE HOUSE, BOSTON, NOV. 27, 2017.....The White House's pick to temporarily lead the Consumer Financial Protection Bureau said Monday he's there to fix the watchdog agency, amid a legal battle over who's in charge and a call from U.S. Sen. Elizabeth Warren to fight his appointment.

Richard Cordray, the CFPB's first director, stepped down from his post Friday after six years at the helm of a bureau charged with protecting consumers from unfair or deceptive financial practices. Cordray named Leandra English, who was his chief of staff, as deputy director, leaving her to step in as the acting director.

But President Donald Trump on Friday made his own acting director appointment, tapping Office of Management and Budget Director Mick Mulvaney to hold the post until the confirmation of a permanent bureau head. English filed a lawsuit seeking to halt Mulvaney's appointment, and U.S. Sen. Elizabeth Warren, who helped establish the bureau, has said the president does not have the power to name an acting director.

"The Administration is aware of the suit filed this evening by Deputy Director English. However the law is clear: Director Mulvaney is the Acting Director of the CFPB," White House spokeswoman Sarah Sanders said Sunday. "Now that the CFPB's own General Counsel – who was hired under Richard Cordray – has notified the Bureau's leadership that she agrees with the Administration's and DOJ's reading of the law, there should be no question that Director Mulvaney is the Acting Director. It is unfortunate that Mr. Cordray decided to put his political ambition above the interests of consumers with this stunt. Director Mulvaney will bring a more serious and professional approach to running the CFPB."

The White House pointed to a memo from CFPB general counsel Mary McLeod advising all personnel to act with the understanding that Mulvaney is leading the agency, saying the Federal Vacancies Reform Act gives Trump the power to designate an acting official, even when another statute spells out succession plans.

English is still deputy director, Sanders said in a press briefing on Monday. Mulvaney said late Monday that English was not at work and he has not met her.

Mulvaney said he's not surprised to see a succession challenge grow out of an agency "that thinks it's not accountable to anybody in the first place," and that he'll "be here until either the court or the president tells me otherwise." If the court were to issue a temporary restraining order against him, Mulvaney said he would "absolutely" adhere to it.

No payments will be made out of the bureau's civil penalties fund in the next 30 days, and there will be a 30-day hold on "anything that is discretionary," according to Mulvaney, who said Trump wants to appoint a permanent director as quickly as possible but also wants to see him "fix" the CFPB.

"He wants me to get it back to the point where it can protect people without trampling on capitalism, without choking off the access to financial services that are so critical to so many folks," Mulvaney said.

Warren, in an email to supporters, said the law that created the bureau makes it clear that in the event of a vacancy, the deputy director -- in this case, English -- becomes acting director who will serve until a permanent director nominee is confirmed by the Senate.

Warren asked her supporters to sign a petition telling Trump, "You cannot override the Dodd-Frank act and put a man who doesn't believe in the CFPB in charge of it."

"We knew that Donald Trump was likely going to use Rich Cordray's departure as his chance to dismantle the CFPB. Earlier this year, he promised corporate CEOs that he would deliver 'a major elimination of the horrendous Dodd-Frank regulations.' And now, he could do it," Warren wrote. "I fought my heart out to build this little agency -- and I'll be damned if we let Donald Trump, Steve Mnuchin and Mick Mulvaney destroy it without a fight."

The Dodd-Frank Act was co-written by former U.S. Rep. Barney Frank of Newton, who said on CNN Monday, "Nothing could be more contradictory to Donald Trump being the friend to the little guy than trying to undermine the most effective agency for the consumer in the financial area we've ever had."

Warren on Tuesday will join a noontime Progressive Campaign Change Committee protest outside the CFPB headquarters in Washington, D.C., calling on Mulvaney to step aside, according to the committee.

Beth Lindstrom, one of the three Republicans vying to run against Warren next year, said in a Twitter post that Warren is wrong on the issue.

"There's no better example of an unaccountable agency than one whose director thinks he can pick his own successor...The president possesses the power to appoint throughout the entire executive branch," Lindstrom wroteMonday afternoon.

According to the consumer advocacy group MASSPIRG, the bureau under Cordray returned $12 billion to over 29 million consumers who were "victims of financial schemes by wrongdoers ranging from Wall Street banks, mortgage companies and for-profit schools to debt collectors, credit bureaus and payday lenders." It has also issued rules dealing with mortgage markets, wire transfers, prepaid cards and payday loans.

"The Consumer Financial Protection Bureau is one of the most important agencies that help consumers who have been victimized by financial institutions or predatory lenders, and it's important that we have a strong agency," MASSPIRG legislative director Deirdre Cummings told the News Service. "Both sides of the legal issue of who can nominate the director will have to be sorted out in court."

Cummings said Mulvaney has an "inherent conflict of interest" because he runs the White House budget office, and the CFPB is designed to be an independent agency.

"The other conflict here is that he has publicly said he thinks the agency is terrible and awful," Cummings said. "He specifically said it was sad, sick and a joke, so he has a distaste for the notion of the office itself, and for those two reasons alone, he ought not to be the director."

In a 2014 video interview with the Credit Union Times, Mulvaney, then a congressman from South Carolina, called the CFPB "a wonderful example of how a bureaucracy will function if it has no accountability to anybody." He said, "It turns up being a joke, and that's what the CFPB really has been in a sick, sad kind of way."

The agency's next director, Cummings said, should have a good understanding of markets and how consumers are affected by financial products, both individually and collectively, and be focused on standing up to the bank lobby.

"Somebody who is going to run the agency really has to take its mission to heart and be that independent office, and be the watchdog that's out there protecting consumers," she said.



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