Consumer Financial Protection Bureau building in Washington, D.C. June 4, 2013. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL

Updated 10:08 p.m.

A top Consumer Financial Protection Bureau official on Sunday night sued the Trump administration to block the appointment of Mick Mulvaney as the temporary director of the independent agency. The lawsuit forces a judge to confront a clash over who should rightfully lead the agency as the White House looks to nominate a permanent replacement for Richard Cordray.

Leandra English. Credit: Credit Union National Association.

Leandra English, named deputy director of the consumer bureau last week, asked a federal judge to declare that Mulvaney, director of Office of Management and Budget, is not the agency's acting director and order the Trump administration to “refrain from appointing any individual to the position of Acting Director of the Consumer Financial Protection Bureau.”

The lawsuit comes just days after Cordray elevated English, his chief of staff, to the deputy role—a promotion that was meant to put her in line to become acting director. Hours after Cordray announced his resignation, effective Nov. 24, Trump appointed Mulvaney to lead the CFPB, setting the stage for a battle over the leadership of an agency Republicans and financial services advocates have assailed and supporters have applauded as a champion for consumers.

“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 Sunday.

The conflicting appointments have thrown the transition of power at the CFPB—the first since the agency was created through the Dodd-Frank financial reform law—into a state of confusion, prompting questions about how the agency will operate with two people claiming to be its rightful leader.

English, who filed her lawsuit with personal lawyers, argued the Trump administration doesn't have authority to name an acting director. Her lawsuit focused on a section of the Dodd-Frank Act that states the agency's deputy director will “serve as acting director in the absence or unavailability of the director.”

Cordray had referenced that section of Dodd-Frank in an email to CFPB staff on Friday, writing that English “will become the acting director pursuant to section 1011(b)(5) of the Dodd-Frank Act.”

“Effective at midnight on November 24, 2017, the bureau's first director, Richard Cordray, resigned his post. At that point, plaintiff Leandra English, the bureau's deputy director, became the agency's acting director by operation of law. The Dodd-Frank Act is clear on this point: It mandates that the Deputy Director 'shall . . . serve as the acting Director in the absence or unavailability of the Director,'” wrote English's lawyer, former CFPB attorney Deepak Gupta of Washington's Gupta Wessler.

“By statute, she serves in that capacity until such time as the president appoints and the Senate confirms a new director,” Gupta wrote in the complaint.

The White House asserted authority to designate an acting CFPB director under the Federal Vacancies Reform Act, which allows the president to appoint any Senate-confirmed official to fill certain vacancies. The Justice Department's Office of Legal Counsel published an opinion Saturday supporting the White House's interpretation of the Federal Vacancies Reform Act.

In the court papers filed Sunday, English argued the succession language in Dodd-Frank expressly dictates the deputy director step in to lead the CFPB in the event of the director's departure. By attempting to install Mulvaney as the acting director, lawyers for English argued, Trump unlawfully moved to undercut the independence of the CFPB.

Mulvaney serves in his Senate-confirmed role at the pleasure of the president. The CFPB director serves a five-year term and can only be removed “for cause,” meaning the president cannot readily fire the agency's leader. That provision in the agency's structure is the centerpiece of a pending case in the U.S. Court of Appeals for the D.C. Circuit.

“Disregarding this statutory language, President Trump issued a press release on the evening of November 24 indicating his desire to install defendant Mulvaney, the director of the White House Office of Management and Budget, as the bureau's acting director,” Gupta wrote. “Under this scenario, Mr. Mulvaney would seek to serve indefinitely as the interim head of a statutorily 'independent' agency while simultaneously occupying his current White House post.”

 

The lawsuit Leandra English filed is posted below: