Trump sued over his pick to lead consumer finance director

President Donald Trump is being sued over his decision to appoint his White House budget director as as interim head of a consumer finance watchdog.

Trump’s pick of Mick Mulvaney to run the Consumer Financial Protection Bureau is being challenged in a lawsuit filed by Leandra English, the bureau’s deputy director.

English argues that she should serve as interim director, and that the law Trump is using to place Mulvaney, who known critic of the agency who once branded it ‘a joke’, at the top of the bureau does not apply.

Not approved: Director of the Office of Management and Budget Mick Mulvaney has been a strong critic of the Consumer Financial Protection Bureau and called it ‘a joke’

The day before the suit was filed, Trump himself unsurprisingly took to Twitter to criticize the bureau.

‘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!’

The suit in the U.S. District Court for the District of Columbia asked for a declaratory judgment and a temporary restraining order to block Mulvaney from taking over the bureau.

English was chief of staff to bureau director Richard Cordray when he named her deputy director as he prepared to resign last Friday.

Cordray was appointed to the position by President Barack Obama and has been long criticized by congressional Republicans as overzealous.

Suing: Leandra English, right, was appointed as deputy director by bureau director Richard Cordray as he prepared to resign last Friday

Mulvaney, a former congressman, has called the agency an example of bureaucracy run amok, and is expected to dismantle much of what the bureau has done.

English cited the Dodd-Frank Act, which created the Consumer Financial Protection Bureau, saying that as deputy director, she became the acting director under the law.

She argues that the federal law the White House contends supports Trump’s appointment of Mulvaney doesn’t apply when another statute designates a successor.

The White House, with the support of an opinion issued Saturday by the Justice Department’s Office of Legal Counsel, maintained that the president has the power to appoint an acting director.

Steven A. Engel, newly confirmed head of the office, wrote that, while the deputy director may serve as acting director under the statute, the president still has authority under the Vacancies Reform Act.

The White House maintained that President Trump has the power to appoint an acting director

A new director must be confirmed by the Senate. Earlier Sunday, Sen. John Thune of South Dakota, the third-ranking GOP leader, pledged swift action whenever Trump nominates a successor to Cordray.

WHAT IS THE CFPB?

The U.S. consumer watchdog agency, was proposed by now-Sen. Elizabeth Warren, D-Mass., in her previous job at Harvard Law School, and it was created as part of the laws passed following the 2008 financial crisis and subsequent recession. It was given a broad mandate to be a watchdog for consumers when they deal with banks and credit card, student loan and mortgage companies, as well as debt collectors and payday lenders.

The idea was to prevent financial companies, such as mortgage servicers, from exploiting consumers. Critics had said those kinds of companies had been subject to weak oversight before the financial crisis.

Under the leadership of its first director, Richard Cordray, the CFPB implemented or proposed a myriad of new rules and regulations for the banking industry. Nearly every American who deals with banks or a credit card company or has a mortgage has been affected by rules the agency put in place.

The agency has also taken legal action against banks, mortgage companies, credit card issuers, payday lenders, debt collectors and others, and extracted billions of dollars in settlements. When Wells Fargo was found to have opened millions of phony accounts for its customers, the CFPB fined the bank $100 million, the agency’s largest penalty to date.

The banking industry has viewed CFPB as a thorn in its side, and accused it of overreaching in its regulation of consumer financial activities. Cordray lost some notable battles, such as when the GOP-led Congress overturned a regulation that would have ensured that customers could band together to sue their banks in a class action.

Meanwhile, Thune said he expected that Mulvaney ‘will be on the job and he’ll be calling the shots over there,’ but acknowledged the issue could end up in court.

Beyond the fight over who’s in charge is the future direction of the bureau, created after the 2008 financial crisis and given a broad mandate as a watchdog for consumers when they deal with banks and credit card, student loan and mortgage companies, as well as debt collectors and payday lenders.

‘All Americans should be deeply concerned about the White House’s cynical decision to flout the law and attempt to put the ringleader of its dangerous, anti-consumer protection policies in charge,’ House Democratic leader Nancy Pelosi of California said in a statement issued before the lawsuit was filed.

Taking aim at Mulvaney, she said the public deserves ‘a champion that protects them from predatory bankers and lenders, not the leadership of a Wall Street pawn who denigrates consumer protection as a ‘sick, sad joke.”

Senate Democratic leader Chuck Schumer joined Pelosi in arguing that English was the rightful acting director. He accused Trump of ignoring the law ‘in order to put a fox in charge of a hen house.’

Thune said he hoped eventually to see ‘reforms to that agency, which has essentially very little accountability to the Congress or anybody else.’

Another Republican, Sen. Lindsey Graham of South Carolina, said he thinks Trump was on ‘good ground’ to pick Mulvaney for the job and hopes Mulvaney ‘will ride herd on these folks.’

Senator Dick Durbin of Illinois, the No. 2 Democrat in the Senate, said putting Mulvaney in charge was part of an effort to destroy the bureau.

‘Wall Street hates it like the devil hates holy water,’ Durbin said. ‘And they’re trying to put an end to it with … Mulvaney stepping into Cordray’s spot. But the statute is specific, it’s clear, and it says that the deputy shall take over.’

Thune appeared on ‘Fox News Sunday’ while Durbin and Graham spoke on CNN’s ‘State of the Union.’

Read more at DailyMail.co.uk