Disgruntled employees at the top consumer watchdog formed 'Dumbledore's Army' to resist their Trump-appointed boss

Alex Wong/Getty ImagesMick Mulvaney.
  • Several staffers at the Consumer Financial Protection Bureau have formed a resistance group they have named “Dumbledore’s Army,” The New York Times reported Wednesday.
  • It’s the latest sign of turmoil at the agency, which is locked in a leadership battle after its outgoing director and President Donald Trump both appointed successors to lead the independent agency.

Turmoil at the Consumer Financial Protection Bureau (CFPB) is ongoing nearly two weeks after President Donald Trump moved to place Office of Management and Budget Director Mick Mulvaney as acting director of the independent agency.

In one example, a group of CFPB employees calling itself “Dumbledore’s Army” is seeking to quietly resist Mulvaney,The New York Times reportedWednesday, citing a pair of sources. The reference is from the “Harry Potter” series in which “Dumbledore’s Army” served as a secret resistance force.

Other employees, some of whom are in senior leadership, have welcomed Mulvaney, even though he has publicly lambasted the consumer watchdog agency that was formed in the aftermath of the financial crisis. A CFPB official told Business Insider last week that senior leadership “unanimously” complied with Trump’s pick.

“All of the senior leadership is firmly behind Mulvaney,” they said. “Whether they truly are behind him or not is a different story.”

Mulvaney has already moved to rapidly change the agency, which he promised upon taking the reins. The acting director placed a moratorium on the approval of payments to some financial crime victims, froze hiring and all new rules and regulations, and called for a reviews of all active investigations and litigation.

“This place will be different, under my leadership and under whoever follows me,” Mulvaney said.

The skirmish over the CFPB’s future began the Friday after Thanksgiving when outgoing director Richard Cordray named his deputy, Leandra English, as acting director. Trump then announced Mulvaney as acting director.

Both sides then battled over who had the legal authority to name the successor. Democratic Sen. Elizabeth Warren, who championed the creation of the agency,and her allies cited language in the 2010 Dodd-Frank Act as proof that Cordray, nominated by President Barack Obama, was in the right, while the Trump administration and its allies said the 1998 Federal Vacancies Reform Act usurps Dodd-Frank.

Dodd-Frank says the bureau’s deputy director shall “serve as acting director in the absence or unavailability of the director.” The heart of the legal dispute is whether “absence” or “unavailability” in Dodd-Frank means a vacancy, as is the case here.

The general counsel for the CFPB sided with the Trump administration on the matter.

English filed a lawsuit in federal court on Sunday in which she called herself the “rightful acting director” and sought a temporary restraining order to prevent Mulvaney, who once called the agency a “sick, sad” joke, from fulfilling Trump’s appointment. A judge ruled in favour of the Trump administration last week, and the issue is being further litigated.

Mulvaney can serve as acting director until a Trump nomination for the post can be confirmed by the Senate, which could take months.

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