2 ‘leaders’ send dueling emails amid an awkward battle for control of the top consumer watchdog agency

Mick Mulvaney. Alex Wong/Getty Images
  • Two people began Monday with the idea that they were serving as acting director of the Consumer Financial Protection Bureau.
  • Leandra English, whom the outgoing bureau chief named the acting director, on Sunday filed a lawsuit to assert her authority.
  • Mick Mulvaney, the White House budget director whom President Donald Trump wants to lead the bureau, has told CFPB staffers to ignore any directives from English.
  • The skirmish is the latest in a heated battle over the agency’s future.

The ongoing brouhaha over who is the rightful interim leader of the Consumer Financial Protection Bureau spilled over into Monday morning, as the two people separately tasked with leading the independent agency sent dueling emails asserting their authority.

In the first email to staffers on Monday, The New York Times reported, Leandra English – whom the departing director, Richard Cordray, named the acting director on Friday – called herself “acting director” and expressed gratitude to her CFPB colleagues “for your service.”

That was followed up by a memo from Mick Mulvaney, the director of the Office of Management and Budget who was tapped by President Donald Trump to serve as acting director of the agency shortly after Cordray announced English, his chief of staff, as his interim successor.

“Please disregard any instructions you receive from Ms. English in her presumed capacity as Acting Director,” the memo to staffers read.

CNBC published an excerpt of the email:

“If you receive additional communications from her today in any form, related in any way to the function of her actual or presumed official duties (i.e. not personal), please inform the General Counsel.

“I apologise for this being the very first thing you hear from me. However, under the circumstances I suppose it is necessary.

“I look forward to working with all of you. If you’re at 1700 G Street today, please stop by the 4th Floor to say hello and grab a doughnut.”

The emails represent the latest development in a tug-of-war over the agency’s leadership.

On Sunday, English, calling herself the “rightful acting director,” filed a lawsuit in federal court seeking a temporary restraining order to prevent Mulvaney from fulfilling Trump’s appointment.

Either English or Mulvaney will serve as acting director until the Senate can confirm a permanent nominee.

On Monday, Mulvaney, who once called the agency a “sick, sad joke,” showed up at the CFPB amid the legal battle to take control, even bringing doughnuts.

Both Trump and Cordray have claimed they have the legal authority to name an acting director of the consumer watchdog agency, which was championed by Democratic Sen. Elizabeth Warren of Massachusetts following the financial crisis.

The legal battle centres on a handful of words

This skirmish centres on language in the 2010 Dodd-Frank Act and whether it usurps the 1998 Federal Vacancies Reform Act.

Trump and his allies say the 1998 law gives him the authority to make the appointment rather than Cordray, who was nominated by President Barack Obama to head the independent agency. The general counsel for the CFPB has sided with the Trump administration on the matter.

But Warren and others on the left say that Dodd-Frank was written with the Vacancies Act in mind and explicitly calls for the bureau’s director, not the president, to name an acting director.

The relevant section of Dodd-Frank says the deputy director “shall be appointed by the director; and serve as acting director in the absence or unavailability of the director.” The heart of the dispute is whether “absence” or “unavailability” means a vacancy.

Elizabeth Warren
Elizabeth Warren. Joe Raedle/Getty Images

Warren’s allies, including one of Dodd-Frank’s authors, say it does.

“I think unavailability might suggest otherwise, but I think a vacancy is an absence,” Barney Frank, a former Democratic representative who helped write Dodd-Frank, told Business Insider. He said that the bill was written to give “structural protections against political interference.”

White House officials argued in a Saturday conference call with reporters that the Vacancies Act permitted Trump to override Cordray’s selection. The law allows for the president to appoint any Senate-confirmed official, such as Mulvaney, as acting director of such an agency.

“The common objections that you hear in these various blog posts online is that ‘Oh, the CFPB statue said the CFPB deputy director shall serve as the director,'” one White House official said,according to The Hill. “That’s clear in lots of these statues that the Vacancies Act trumps.”

If the Trump administration prevails in this fight, Mulvaney will remain in charge of the OMB while running the bureau, which has long been chastised by the right.

Frank said that because the bureau is intended to operate independently of the White House, Mulvaney “would be at the very top” of the list of people who wouldn’t fit the bill to be its acting director.

“It’s just ridiculous that he could run the CFPB in his lunch hour,” Frank said. “It’s an indication that they don’t want it to do anything at all. But of all the people, he has the least independence of anybody.”

Warren’s office said she would meet with English on Monday.