Rival appointments set up showdown to lead agency

President Trump on Friday announced that he is appointing Office of Management and Budget Director Mick Mulvaney as acting director of the Consumer Finance Protection Bureau (CFPB), setting up a potential fight over the agency’s future. 

Earlier Friday, CFPB head Richard Cordray announced that he was stepping down at the end of the day and elevated his chief of staff, Leandra English, to deputy director.

Cordray, the first and only director the agency has seen since it was created, is rumored to be eying a bid for Ohio governor. He announced earlier this month that he would be resigning before December.

The conflicting promotion from Cordray and appointment from Trump sets up a fight with little clear precedent, as there are now two acting CFPB heads. It’s the latest challenge to the CFPB’s standing as an independent agency.

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The 2010 Dodd-Frank Act, the financial reform law which created the CFPB, established the deputy director position to lead the bureau between permanent directors.

Cordray cited the specific provision of Dodd-Frank that lays out the succession process in his announcement to CFPB employees. The deputy director position had previously been filled by David Silberman in an acting capacity.

“In considering how to ensure an orderly succession for this independent agency, I determined that it would be best to avoid leaving this key position filled only in an acting capacity,” Cordray said.

“In consultation over the past few days, I have also come to recognize that appointing the current chief of staff to the deputy director position would minimize operational disruption and provide for a smooth transition given her operational expertise.”

Even so, the Federal Vacancies Act allows the president to appoint any administration official previously confirmed by the Senate.

In a statement sent out just over an hour after Mulvaney’s appointment was announced, the White House said it would be holding a conference call with reporters on the designation on Saturday morning.

Whether English or Mulvaney leads the CFPB can drastically affect the bureau’s work until Trump nominates and the Senate confirms a new director.

English, a senior CFPB employee, would likely continue the agency’s aggressive enforcement actions and sweeping lending rules. Mulvaney, a staunch conservative who once called the CFPB “a sick, sad joke” would likely freeze or significantly change the agency’s current agenda.

The White House said Trump “looks forward to seeing Director Mulvaney take a common sense approach to leading the CFPB’s dedicated staff, an approach that will empower consumers to make their own financial decisions and facilitate investment in our communities.”

The CFPB under Cordray issued transformative rules on mortgages and lending disclosures, student debt, predatory lending and used car loans while cracking down on fraud across the industry. The bureau won more than $12 billion in restitution for more than 30 million defrauded consumers, a figure often cited by its allies.

But Republicans, banks and much of the financial services industry has long insisted that the CFPB has overstepped its boundaries and faces no official accountability to Congress through its independence.