CFPB’s Cordray resigns, fracas ensues

Cordray named former chief of staff Leandra English as deputy director of the agency, to serve as the bureau’s acting director. Trump, however, appointed Office of Management and Budget Director Mick Mulvaney as the CFPB’s interim director.

Richard Cordray, director of the Consumer Financial Protection Bureau, stepped down Nov. 24. After a brief clash over his replacement, OMB Director Mick Mulvaney is set to take over from Cordray.

While President Trump has the right to name Cordray’s permanent replacement, an argument broke out over who would be the bureau’s interim director.

The same day he resigned, Cordray named former chief of staff Leandra English as deputy director of the agency, to serve as the bureau’s acting director.

A few hours after English’s promotion, however, Trump appointed Office of Management and Budget Director Mick Mulvaney as the CFPB’s interim director. Like many Republicans, Mulvaney is an outspoken critic of the CFPB, and as a congressman voted to dismantle the agency.

“The law is clear here. It says that the director, that was me on Friday, shall appoint a deputy director. I did that,” Cordray said on MSNBC’s “The Rachel Maddow Show.” Should there be a deputy director when the director resigns, the deputy director becomes acting head, Cordray said, citing the 2010 Dodd-Frank Act.

White House and Justice Department officials disagreed, pointing to the Federal Vacancies Reform Act as a justification of President Trump’s authority to appoint Mulvaney.

English filed a lawsuit against Trump and Mulvaney on Sunday to block Mulvaney’s appointment, whom the lawsuit called “the person claiming to be acting director” of the CFPB. “The President’s purported or intended appointment of defendant Mulvaney as acting director of the CFPB is unlawful,” it said.

“The talented and hard-working CFPB staff stand up for consumers every day. As acting director, I am filing this lawsuit to stand up for the CFPB,” English said in a statement.

Mulvaney fired back with an email telling CFPB staff, “Please disregard any instructions you receive from Ms. English in her presumed capacity as acting director,” according to Reuters. He also announced a 30-day hiring and regulatory freeze on Nov. 27.

U.S. District Judge Timothy Kelly — a Trump appointee — sided with the President and Mulvaney on Tuesday after both sides presented their arguments during an emergency hearing on Monday.

Cordray’s departure marks an opportunity for Trump to shape the CFPB, and some in the financial services industry suggested it is an ideal time to rework the bureau’s structure.

“We will also continue to support structural changes that would increase accountability at the Bureau, including a five-member, bipartisan commission,” said Rob Nichols, president and CEO of the American Bankers Association. “This would provide continuity across Administrations and broaden the CFPB’s perspective on regulation that must carefully balance consumer protection against access to credit.”

Many have speculated that Cordray’s resignation sets the stage for a bid for the governorship in Cordray’s home-state of Ohio.