The Slatest

Consumer Protection Agency Has Two Bosses as Trump Tries to Take Control of Watchdog

Consumer Financial Protection Bureau Director Richard Cordray arrives at a meeting of the Financial Stability Oversight Council November 16, 2016 at the Treasury Department in Washington, D.C.

Alex Wong/Getty Images

Democratic lawmakers were out in full force Saturday criticizing President Donald Trump’s move to appoint an acting director for the Consumer Financial Protection Bureau (CFPB), characterizing it as an effort to decimate the power of a watchdog that Republicans have long disliked. The White House, for its part, insisted Trump was well within his rights to nominate someone to serve as interim director. That means it’s unclear what will happen Monday.

How did we get here? It all happened in quick succession Friday afternoon. First, Richard Cordray, who had been appointed to the bureau by then President Barack Obama, abruptly resigned. Cordray said his deputy, Leandra English, will be the acting director until Congress confirms someone for the post. Trump, however, quickly moved to name White House budget chief Mick Mulvaney to serve as acting director of the bureau.

The leadership duel may sound like the typical Washington insider politics but it could play a key role in shaping the agency that was created after the financial crisis to watch over lenders. Mulvaney has been sharply critical of the CFPB in general and Cordray’s actions over the past six years. Indeed, Cordray’s actions of naming his deputy as acting director seemed to be a clear effort to prevent Trump from reshaping the watchdog before the Senate approves a replacement, a process that could take months.

The White House is defending Trump’s appointment, saying it got the go-ahead from the Justice Department. “We think the clear legal authority is that the president does have this authority. We’ll find out based on how Ms. English decides to act at the appropriate time,” one official told the Washington Post. Cordray, however, disagreed, saying that he is the one authorized by law to appoint a deputy direction. “My understanding of the law is that the deputy director serves as the acting director upon my resignation,” he said. “If there are disagreements about these issues, the appropriate place to settle them would be in the courts.”

Other Democrats agree with Cordray. Sen. Elizabeth Warren, who was one of the key architects of the watchdog agency, wrote on Twitter that the law is on Cordray’s side. “The Dodd-Frank Act is clear: if there is a @CFPB Director vacancy, the Deputy Director becomes Acting Director. @realDonaldTrump can’t override that,” she wrote. Warren noted that while Trump is within his rights to nominate the next CFPB head, “until that nominee is confirmed by the Senate, Leandra English is the Acting Director under the Dodd-Frank Act.”

Rep. Maxine Waters, who is the top Democrat on the House Financial Services Committee, said Mulvaney is an “unacceptable candidate to lead the Consumer Bureau.”

Some consumer-rights groups are also siding with Cordray. “In an attempt to install a wrecking ball at the helm of the consumer watchdog, President Trump has ignored the law that dictates that the consumer bureau’s deputy director takes over until Congress can confirm a new director,” Lauren Saunders, associate director of the National Consumer Law Center, said.