U.S. court backs Trump in battle over
interim consumer watchdog head
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[November 29, 2017]
By Patrick Rucker and Michelle Price
WASHINGTON (Reuters) - A U.S. District
Court judge on Tuesday sided with President Donald Trump in a legal
battle over who should be in charge of the U.S. consumer finance
watchdog, allowing White House budget director Mick Mulvaney to serve as
Judge Timothy Kelly ruled against Leandra English, deputy director of
the Consumer Financial Protection Bureau (CFPB) who claimed to be its
rightful interim director. He denied her request for a temporary
restraining order to block Mulvaney's appointment.
She had argued in a lawsuit suit filed on Sunday that the 2010
Dodd-Frank Wall Street reform law that created the CFPB stipulates that
the agency’s deputy director is to take over in the short term.
In its defense filed on Monday night, the Trump administration said the
1998 Federal Vacancies Act gives the White House the ultimate power to
say who is in charge and granting the restraining order would be an
extraordinary intrusion into the executive branch.
Kelly sided with the White House's interpretation of the law following a
hearing on Tuesday afternoon.
"Undeniably, the CFPB was intended to be independent, but it is part of
the executive branch," Kelly, a Trump appointee, said.
The decision was a blow for Democrats and consumer advocacy groups who
had rallied to English's cause, fearing the agency will be weakened by
Mulvaney, one of its fiercest critics.
CFPB Director Richard Cordray, a Democrat appointed by the Obama
administration, resigned on Friday and named English to lead the agency
until a new director was confirmed by the U.S. Senate, a process that
could take months.
Hours later, Trump said Mulvaney would lead the agency on an interim
basis, sparking an unprecedented showdown.
The CFPB was created to crack down on predatory financial practices
after the 2007-2009 financial crisis, but it is reviled by Republicans
who say it is too powerful.
Speaking to reporters outside the court in Washington, English's lawyer,
Deepak Gupta, said he would ultimately seek to take the case to a higher
"I think whatever happens here there is going to be an appeal," he said.
[to top of second column]
Office of Management and Budget (OMB) Director Mick Mulvaney speaks
to the media at the U.S. Consumer Financial Protection Bureau
(CFPB), where he began work earlier in the day after being named
acting director by U.S. President Donald Trump in Washington
November 27, 2017. REUTERS/Joshua Roberts
The White House applauded the ruling. "It’s time for the Democrats
to stop enabling this brazen political stunt by a rogue employee and
allow Acting Director Mulvaney to continue the bureau's smooth
transition into an agency that truly serves to help consumers,”
Deputy Press Secretary Raj Shah said.
In a message on social network Twitter later on Tuesday, Trump
hailed the decision as a "big win for the consumer!"
Trump has long sought to weaken or abolish the 1,600-employee
agency, saying too many regulations are suffocating lending.
Mulvaney sought to dismantle the CFPB when he served as a Republican
in the U.S. House of Representatives.
Democrats say the agency needs to oversee consumer financial
products such as mortgages and have power over large non-bank
financial companies to protect borrowers.
To fight the ruling, English's next step would be to seek a
preliminary injunction against the administration. If that is
dismissed, English can appeal the ruling in Circuit Court, legal
"The ball is now back in English's court," said Alan Kaplinsky, head
of the consumer financial services group for law firm Ballard Spahr.
(Reporting by Michelle Price, Pete Schroeder, Patrick Rucker and
Makini Brice; Writing by Doina Chiacu and Michelle Price; Editing by
Jonathan Oatis and Cynthia Osterman)
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