CFPB's new acting director sues Trump administration

President Donald Trump named Mick Mulvaney who serves as head of the White House Office of Management and Budget as interim director of the Consumer Financial Protection Bureau

Dueling bosses both try to lead at the CFPB

Two senior government officials claim to be rightfully in charge of the Consumer Financial Protection Bureau - a Trump appointee and the agency's new deputy director - and the politically charged case was poised to play out in the federal courts.

The conflict began on Friday when Richard Cordray, a Democrat appointed CFPB director by then-President Barack Obama, formally resigned and named English, his chief of staff, as acting director.

That was the sweet move made by former congressman Mick Mulvaney after he was appointed to head the Consumer Financial Protection Bureau.

She said as deputy director, she became the acting director under the law and argued the federal law the White House contends supports Trump's appointment of Mulvaney doesn't apply when another statute designates a successor. On Monday, Mulvaney was reportedly given "full cooperation" from the CFPB staff and he showed up to his first day on the job with doughnuts. "Congress ensured that the President could not circumvent the need for Senate confirmation by naming a temporary replacement for a Director who leaves before the expiration of his or her term". Both Mulvaney and English claimed to be the rightful acting director.

The agency is perhaps most famous for leading the charge against commercial banking giant Wells Fargo, which created millions of phony bank and credit card accounts that resulted in untold sums in fees for customers, damaged credit scores and higher interest rates.

Until the resignation of Mr Cordray - an Obama appointee who is seen as a likely Democratic candidate for OH governor - the bureau was one of the last bulwarks against Mr Trump's efforts to weaken financial regulation.

Cordray said Monday that the issue should be settled by a court. "I don't want anything coming out of here that I don't know about", Mulvaney said.

Former Rep. Barney Frank, a Massachusetts Democrat, told MSNBC late Monday the drafters of Dodd-Frank worked intentionally to isolate the consumer agency from the pressures of politics and said that's why it created a system for succession as part of the law. These rules are still in the works.

"Now that the CFPB's own general counsel - who was hired under Richard Cordray - has notified the bureau's leadership that she agrees with the Administration's and DOJ's reading of the law, there should be no question that Director Mulvaney is the acting director", White House spokeswoman Sarah Sanders said in a statement.

"This agency will stay open", he said.

Trump appointee Mick Mulvaney walks through a gate to the Eisenhower Executive Office Building after leaving the Consumer Financial Protection Bureau in Washington, Monday morning, November 27, 2017.

But it will take more than donuts to legitimize Mulvaney's role.

Both officials reportedly asserted control of the agency in emails to staff, each signing as "acting director".

The administration argued earlier on Monday that under the 1998 Federal Vacancies Act it has the right to appoint Mulvaney, adding it would be a "radical" step for a court to grant an injunction against a president and that doing so would harm him and the consumer watchdog.

Meanwhile Mulvaney quickly responded to English's email, instructing CFPB staff to "disregard" any directions from her.

One straightforward solution to the issue of who runs the CFPB is for Trump to nominate his own permanent director.

A new director must be confirmed by the Senate.

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