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District Judge Sides With President Trump on CFPB Director

Gavel Three BHA federal judge appointed by President Trump has delivered the administration a legal victory with a decision supporting the President’s choice for head of the Consumer Financial Protection Bureau.

U.S. District Judge Timothy J. Kelly refused Wednesday to block President Trump’s appointment of White House Budget Director Mick Mulvaney to head the CFPB. That request had been made by Leandra English, who was appointed acting head of the Bureau by former CFPB Director Richard Cordray after he announced his retirement in November 2017. English had previously served as Cordray’s chief of staff.

When President Trump then appointed outspoken CFPB critic Mulvaney to head the organization, the stage was set for turmoil and controversy in the months to come. With both Mulvaney and English arguing that they were the legitimate Acting Director of the Bureau, English filed a lawsuit seeking a temporary restraining order. At the time even the CFPB’s own general counsel said the law was on the President’s side, but it was clear that a protracted legal battle lay ahead.

Judge Kelly said that English had failed to meet the “exacting standard” necessary for him to issue a preliminary injunction, adding that he saw nothing the CFPB’s designation as an independent bureau that would dictate who could serve as acting director. In his written opinion, Judge Kelly said, “The president has designated Mulvaney the CFPB’s acting director, the CFPB has recognized him as the acting director, and it is operating with him as the acting director. Granting English an injunction would not bring about more clarity; it would only serve to muddy the waters.”

English’s argument hinges upon the notion that the CFPB was intended to be an independent agency, and cites the 2010 Dodd-Frank Act, which created the agency. President Trump’s case cites the 1998 Federal Vacancies Reform Act to support the administration’s position.

In his written opinion, Judge Kelly said, “The best reading of the two statutes is that Dodd-Frank requires that the deputy director ‘shall’ serve as acting director, but that under the FVRA the president ‘may’ override that default rule.”

Department of Justice spokeswoman Lauren Ehrsam told Law360, “We are pleased the court vindicated the President’s authority to appoint Mick Mulvaney as Acting Director of CFPB, finding that Ms. English had not shown a substantial likelihood of success on the merits, and is unlikely to suffer irreparable harm.”

Deepak Gupta of Gupta Wessler PLLC, an attorney who is representing English, said on Twitter Wednesday night that, “The law is clear: President Trump may not circumvent the Senate confirmation process by installing his White House budget director to run the CFPB part time. Mr. Mulvaney’s appointment undermines the bureau’s independence and threatens its mission to protect American consumers.”

About David Wharton

David Wharton, Online Editor at the Five Star Institute, is a graduate of the University of Texas at Arlington, where he received his B.A. in English and minored in Journalism. Wharton has over 15 years of experience in journalism and previously worked at Thomson Reuters, a multinational mass media and information firm, as Associate Content Editor, focusing on producing media content related to tax and accounting principles and government rules and regulations for accounting professionals. Wharton has an extensive and diversified portfolio of freelance material, with published contributions in both online and print media publications. Wharton and his family currently reside in Arlington, Texas. He can be reached at David.Wharton@DSNews.com.

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