A federal judge decided on Tuesday to leave White House Budget Director Mick Mulvaney in place as acting director of the Consumer Financial Protection Bureau.
Leandra English, the CFPB’s deputy director, had requested an emergency restraining order to stop Mulvaney from taking over as acting director of the agency. U.S. District Judge Timothy Kelly declined that request.
“Denying the president’s authority to appoint Mr. Mulvaney raises significant constitutional questions,” Kelly said.
English was appointed deputy director of the CFPB after its former director, Obama administration holdover Richard Cordray, announced he was leaving office. English, formerly Cordray’s chief of staff, said in her suit that her role as deputy director legally grants her authority to serve as acting director of the agency until Congress can confirm a permanent replacement for Cordray.
The White House, however, argued it had the authority to select an acting director for the consumer watchdog agency.
“We think the clear legal authority is that the president does have this authority,” an administration official told reporters in a call on Saturday, one day before English filed her suit. “We’ll find out based on how Ms. English decides to act at the appropriate time.”
“This is about Wall Street banks versus families, and right now Donald Trump has put himself firmly on the side of Wall Street banks.”
The bureau, which was created under the 2010 Dodd-Frank Wall Street reform law, oversees financial services such as banks, mortgage lenders and student loans. Critics see Mulvaney’s appointment as a step toward dismantling the agency — a move the budget director previously supported.
Mulvaney arrived for work on Monday despite English’s legal challenge, and instructed agency workers to “disregard” any instructions from the deputy director.
“Please disregard any instructions you receive from Ms. English in her presumed capacity as Acting Director,” Mulvaney wrote in a memo, according to Reuters. “If you receive additional communications from her today ... please inform the General Counsel.”
Democrats have sought to frame the leadership battle as one over the future of Wall Street regulation. Sen. Elizabeth Warren (D-Mass.) — one of Congress’ most prominent Wall Street critics — on Tuesday rallied supporters outside CFPB headquarters in Washington, D.C.
“This is about Wall Street banks versus families, and right now Donald Trump has put himself firmly on the side of Wall Street banks,” she told reporters.
“I say we start by following the law,” Warren said. “If Donald Trump wants to name a nominee, name him and bring him over to the Senate for the hearing.”
This is a developing story and has been updated.