The U.S. Justice Department on Monday, defending the Trump administration's appointment of Mick Mulvaney as the interim director of the Consumer Financial Protection Bureau, urged a Washington federal judge not to block the president's plan for the transition of power at the Obama-era agency.

Mulvaney, director of the Office of Management and Budget, took the helm Monday as acting director, just as Leandra English, the agency's deputy director, claimed her hold as the temporary leader. The dispute erupted over the Thanksgiving holiday, when the departing director, Richard Cordray, promoted English to the deputy slot—a move that put her in line temporarily to take over the agency until a permanent director is nominated and confirmed by the U.S. Senate.

Leandra English. Credit: Credit Union National Association.

English, formerly the CFPB's chief of staff under Cordray, on Sunday night sued Mulvaney and Trump. Her complaint—filed by former CFPB attorney Deepak Gupta of Washington's Gupta Wessler—urged a judge to issue a temporary restraining order stopping Mulvaney's control of the agency.

U.S. District Judge Timothy Kelly on Monday afternoon met with the lawyers in the case but did not rule from the bench. Kelly, a Trump appointee to the federal trial court, did not indicate when he would rule. Brett Shumate, a former Wiley Rein partner, argued for the government. Top Main Justice lawyers—including Chad Readler, the acting head of the civil division—attended the argument.

Shumate pointed to an opinion from the Justice Department's Office of Legal Counsel and a memo by CFPB general counsel Mary McLeod, both of which supported the president's authority to appoint an acting CFPB director under the Federal Vacancies Reform Act. The law, which allows the president to fill certain vacancies with officials already confirmed to other positions, does not apply to some independent agencies. But the CFPB, Shumate said, is not one of those exempted independent agencies.

“Mr. Mulvaney was a proper person who could be designated,” Shumate said.

The lawsuit alleged the Trump administration's move to install Mulvaney violated the terms of the Dodd-Frank financial reform law. That law, which itself gave rise to the consumer bureau, says the deputy director would take over leadership in the absence of a director. The White House announced Mulvaney's appointment last week, hours after Cordray said English would become the deputy director, a slot that had been unfilled for some time.

On Monday, Gupta said the legislative history of Dodd-Frank dictated a “mandatory” succession process under which the deputy director would serve as acting director until a new permanent director was confirmed by the Senate. He also argued Mulvaney's appointment to the acting director role undercuts the CFPB's independence.

“It would be as if an economic adviser of the president served as chair of the Federal Reserve Board,” Gupta said in court Monday.

Gupta is seeking an emergency temporary restraining order blocking the appointmentof Mulvaney. Shumate disputed the need for any emergency decision, telling Kelly that it “really wouldn't be necessary.”

Shumate said Mulvaney was welcomed at the CFPB headquarters Monday morning and “treated as acting director of the CFPB.” While he could not assure Kelly that English would keep the deputy role under Mulvaney, Shumate said he had “no knowledge” of plans to remove her from the agency.

The White House earlier pointed to the Office of Legal Counsel opinion and McLeod's memo in making the case in support of Mulvaney.

“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,” Sarah Sanders, the White House press secretary, said in a statement. “It is unfortunate that Mr. Cordray decided to put his political ambition above the interests of consumers with this stunt. Director Mulvaney will bring a more serious and professional approach to running the CFPB.”

McLeod, the general counsel, was on the Justice Department's brief filed late Monday in response to the suit English filed.

WATCH: NLJ affiliate Credit Union Times spoke with Mulvaney in 2014 about the CFPB, which the then-U.S. representative called a “sick, sad joke.”

READ: The Justice Department's brief filed Monday is posted here:

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