Mulvaney CFPB

On November 24, the Obama appointed leader of the Consumer Financial Protection Bureau (CFPB), Richard Cordray decided to step down. Initially, His decision triggered a standoff between the Trump administration and the bureau over who would run the agency.

As President, Donald Trump is required to fill the position, but the Senate is also required to confirm that replacement. At the same time as with any process, it is also required that the outgoing director name their replacement. This was in fact done with a letter from Cordray who named his chief of staff, Leandra English, as both deputy director and acting director.

In their report about the resignation, The New York Times suggested that Cordray’s decision was seen as a way for him to block Trump from naming his own acting director. There’s no doubt that the move was appropriate given the efforts that the Trump administration has made to undermine every government agency by selecting disruptors to lead them.

The President’s anger for these organizations was clear from his campaign slogan to “drain the swamp.” This determination was further confirmed in his first year as President when it was obvious that most of the people Trump selected for his Cabinet were anything but qualified to lead those agencies.

Most of those picks held backgrounds that were entirely the opposite of what one would generally expect to have when leading those agencies. In many cases, they had lobbied extensively to shut those bureaus down. The President confirmed this again on Saturday when he lambasted the CFPB in a tweet.

The CFPB was created by the 2010 Dodd-Frank Act after the financial crisis of 2007. Their purpose was to hold financial corporations who had created the crisis accountable. Recent efforts by the CFPB were seen with the Wells Fargo scandal where the bank had created millions of fake accounts to funnel money to their investors. Former Rep. Barney Frank who co-authored the Act told CNN last Saturday that the CFPB was supposed to be independently run.

Yet President Trump put his budget director Mick Mulvaney to lead the agency last Friday. The President’s move also matches a similar pattern where he assigns a single person within his staff to hold more than one responsibility. Reminiscent of the role the President’s son-in-law Jared Kushner plays when he takes on the responsibilities of other cabinet members such as that of a secretary of state.

The President has also moved to roll back parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act, eliminating the restrictions against banks. A move that a handful of Democrats support. In a recent press briefing, Sen. Elizabeth Warren (D-Mass.) said that the Republicans have been adamantly against the CFPB and had been attacking Cordray since he’s led the agency. She said that this was because the CFPB prevented Republican’s rich friends from profiting on the backs of working people.

In February, President Trump admitted as much during a press briefing when he talked about going after the regulations in the Dodd-Frank act saying:

“We expect to be cutting a lot out of Dodd-Frank, because, frankly, I have so many people, friends of mine that have nice businesses that can’t borrow money, they just can’t get any money because the bansk just won’t let them borrow because of the riules and regulations in Dodd-Frank.”

As for the Dood-Frank Act itself, only legislation will be able to roll back those regulations which fall into the hands of Republicans, who Warren has said have been wanting to go after the CFPB from the beginning. With the President’s move to use Mulvaney to lead the agency, there is no doubt that Republicans will get their way and be able to restrict the CFPB as they’ve been wanting to do since the beginning.

But this also reveals the President’s determination to go after his political rival, Elizabeth Warren. Sen. Warren proposed the agency back in 2007 while she was a Harvard law professor but had also picked Cordray to be the CFPB’s enforcement director and recommended him to President Obama in 2010. Republicans, however, had blocked him from leading the agency for two years before they finally agreed to in 2013.

This should be noted because since President Obama’s efforts to appoint Richard Cordray was stalled by opposition Republicans in 2011. Obama had to then issue a recess appointment by executive order to put Cordray in which was challenged in a federal court.  But with Republicans still holding the majority and now a Republican president in office, there was no resistance against Donald Trump’s appointment.

In fact, even Sen. Tom Cotton (R-AR) called for Mulvaney to fire anyone who questioned his authority, including Leandra English.

As mentioned, President Trump has put unqualified people in positions to lead government agencies and Mick Mulvaney is no exception. One agency that can be used as an example is the Environmental Protection Agency (EPA) which is now run by director Scott Pruitt. For years, Pruitt had lobbied against the EPA on behalf of the fossil fuel industry as Oklahoma’s attorney general. It would seem that Pruitt’s effort to sue the EPA 14-times was what got the President’s attention to nominate him as director.

Such is the case with Mulvaney, who the executive director of Americans for Financial Reform, Lisa Donner, said “is opposed to the very existence of the CFPB, and as a member of Congress he voted in favor of Wall Street banks and predatory lenders — his largest donors — again and again.”

But in her statement, Donner also seemed optimistic that the statute in the Dodd-Frank Act was enough to hold Leandra English in place as acting director.

At the same time, the White House expressed similar confidence last Saturday saying that the Federal Vacancies Reform Act gave the President the power to appoint anyone he wanted to the agency. The assistant attorney general of the Justice Department’s Office of Legal Counsel, Steven Engel, also released a memo on Saturday saying that the President had authority over Dodd-Frank through the Reform Act.

Even with headlines like: “Who’s the boss come Monday at consumer agency?” by The Washington Post, it shouldn’t have shocked anyone that Mulvaney would be the boss. Again, with a Republican-controlled Senate who decides on those replacements, they no doubt will allow President Trump to do as he wishes with an agency they never wanted in the first place.

It was reported on Monday that Mulvaney showed up to the building with donuts but then issued a memo to the staff to tell them that they should ignore any requests made by English who did not show up. That Sunday, English had filed a lawsuit against Mulvaney which was shot down by a Trump appointed federal judge who refused to block the Trump administration. Reuters reported on Friday that English would seek a preliminary injunction against the administration by December 5.


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