White House says Trump has right to name CFPB head, setting up clash

 In Politics

Donald Trump is pictured. | Getty Images

President Donald Trump and the former director of Consumer Financial Protection Bureau are headed for a legal showdown. | Lee Jin-Man/Getty Images

Updated


The White House on Saturday said President Donald Trump has the authority to put budget director Mick Mulvaney at the helm of the Consumer Financial Protection Bureau, setting the stage for what could be a protracted legal battle.

A senior administration official said the decision to appoint Mulvaney was informed by communication with the Justice Department’s Office of Legal Counsel, which will issue a formal opinion soon. Mulvaney, director of the Office of Management and Budget, will start his second job at the CFPB Monday morning, replacing Richard Cordray, who resigned Friday.

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“It seems like a pretty clear-cut legal question,” the official told reporters. “We consulted with the OLC, they have signed off on it.”

Yet Mulvaney’s appointment came just hours after Cordray abruptly resigned and named the agency’s chief of staff, Leandra English, as deputy director, establishing her as his successor as he steps down.

The competing moves plunged the agency into confusion over the leadership of the bureau, which was established in the wake of the financial crisis and has become a target for relentless attacks by Republicans and business executives for its aggressive enforcement.

The legal counsel’s opinion is still being drafted, the official said. The Justice Department did not immediately respond to requests for comment.

Mulvaney “will go into the office Monday and start working,” another senior administration official said.

Trump later Saturday tweeted: “The Consumer Financial Protection Bureau, or CFPB, has been a total disaster as run by the previous Administrations pick. Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!”

He followed up quickly with another tweet: “Check out the recent Editorial in the Wall Street Journal @WSJ about what a complete disaster the @CFPB has been under its leader from previous Administration, who just quit!”

Trump and Cordray, long at odds over the direction and future of the agency, are headed for a showdown in court that could take months or more to unravel.

On Trump’s side is the Federal Vacancies Reform Act of 1998, which allows the president to designate a Senate-confirmed official to perform the functions of a vacant position until a nominee can be confirmed to the office.

In Cordray’s corner is the Dodd-Frank Act, the landmark 2010 law that created the CFPB and sets up its own line of succession, stating that the bureau’s deputy shall serve as acting director in the “absence or unavailability of the Director.”

Cordray pitched the bureau into that legal chasm just after 2 p.m. Friday, when he elevated English to deputy director. Minutes later, Cordray said he would resign at the end of the day. On Nov. 15, he had said he would step down at the end of the month.

“Appointing the current chief of staff to the deputy director position would minimize operational disruption and provide for a smooth transition given her operational expertise,” Cordray wrote in his resignation letter to staff.

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