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Judge Sides With Trump in Battle for Control of CFPB

November 29, 2017

By Gregory Arroyo

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WASHINGTON, D.C. — The battle for control of the Consumer Financial Protection Bureau (CFPB) was decided in federal court Tuesday evening, but the fight may not be over.

U.S. District Judge Timothy J. Kelly sided with the White House in a lawsuit filed by Leandra English, former bureau Director Richard Cordray’s pick for acting director, to block President Trump’s appointment of White House Budget Director Mick Mulvaney to the post. The decision means Mulvaney can serve as acting director of the agency, at least for now.

Judge Kelly, a Trump appointee confirmed in September, denied English’s request for a temporary restraining order on grounds that the Federal Vacancies Reform Act (FVRA), which was signed in 1998, gives the president the authority to appoint a replacement. He added that nothing in the FVRA prevents Mulvaney, who will retain his title as White House budget director, from holding dual roles.

In court filings, English’s attorneys had questioned whether allowing Mulvaney, who once characterized the bureau as a “sick joke,” to continue serving as a White House official would compromise the bureau’s independence.

English filed her lawsuit on Sunday, Nov. 26 — two days after Cordray officially tendered his resignation as bureau head and established his former chief of staff as acting director when he elevated her title to deputy director. The White House countered hours later by naming Mulvaney to the post, a move backed by the U.S. Department of Justice and the CFPB’s general counsel in two separate memos issued the next day.

In her lawsuit, English argued that she was the rightful acting director due to a successor statute in the CFPB-creating Dodd-Frank Act. It allows the deputy director to serve as acting director “in the absence or unavailability of the director.”

Judge Kelly heard arguments during an emergency hearing on Monday, Nov. 27, the same day bureau staffers returned from the Thanksgiving break to dueling emails in which the two acting directors laid claim to the title. Kelly declined to rule immediately, issuing his ruling the following day.

The White House applauded Kelly’s decision in a statement issued shortly after his ruling, saying it’s “time for Democrats to stop enabling this political stunt by a rogue employee.” Deepak Gupta, English’s attorney and former senior counsel for the bureau, said the ruling would “not be the final answer.”

Gupta hinted that the case would move forward with a possible request for a preliminary injunction against Trump’s appointment. A denial would set the stage for an appeal.

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