A federal judge again has ruled that Office of Management and Budget Director Mick Mulvaney may remain acting director of the CFPB.
In his ruling, issued late Wednesday, Judge Timothy Kelly of the U.S. District Court for the District of Columbia, said that President Trump had the power to appoint Mulvaney and that a section of Dodd-Frank does not override that right.
Kelly ruled that Deputy Director Leandra English was not entitled to a restraining order stating that Mulvaney's appointment was illegal. He previously ruled that she was not entitled to a temporary injunction keeping Mulvaney from operating as acting director.
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The ruling is particularly crucial since Mulvaney is an avowed opponent of much of the agency's work, while English would have been likely to continue aggressive enforcement.
"We are disappointed in today's decision," said English's attorney, Deepak Gupta. "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."
Mulvaney was President Trump's choice to head the office on a temporary basis following the resignation of Director Richard Cordray. However, just before leaving office, Cordray appointed English as deputy director. English has argued that under Dodd-Frank the deputy director assumes the director's position in the absence or unavailability of the director.
However, the Trump Administration has argued that under the Federal Vacancies Act, the president had the power to select someone to assume the acting director's position as long as that person had been confirmed by the Senate for another position.
Kelly ruled that under Dodd-Frank, the deputy director shall serve as the acting director, but the president can override that by appointing someone under the vacancies act.
The judge, a Trump appointee, said that under English's argument, Cordray could have selected a totally unqualified person to serve as acting director and the president would have no power to remove that person.
He said that the problem is compounded by Dodd-Frank having given the CFPB unchecked regulatory and enforcement powers. That is an argument that many conservative critics have leveled against the agency.
Mulvaney presumably will stay as acting director of the agency until a permanent director is nominated and confirmed by the Senate.
President Trump has not nominated anyone for that position, although sources have said that NCUA Chairman J. Mark McWatters is a leading candidate for the job.
Mulvaney critics have charged that he is already rolling back agency supervisory and enforcement actions.
Sen. Elizabeth Warren (D-Mass.), the Senate's staunchest defender of the CFPB has charged that Mulvaney is using a report by the agency's Inspector General to stall agency actions.
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