A federal judge has dismissed a lawsuit filed by a New York City credit union that challenged the appointment of Mick Mulvaney as acting director of the CFPB.
U.S. District Judge Paul Gardephe ruled on Friday that the Lower East Side People's Federal Credit Union did not have standing to challenge the appointment.
"The mere fact that the plaintiff is regulated by the CFPB does not confer standing to bring this suit," the judge ruled, adding that the credit union was relying on a "fear-based theory" to challenge the appointment.
The credit union filed the suit contending that President Trump's appointment of Mulvaney, an outspoken critic of the CFPB, as interim director was illegal.
The credit union argued that Leandra English, the agency's newly appointed deputy director, should be running the agency under the Dodd-Frank Act. However, the administration contended that the Federal Vacancies Act gave President Trump the authority to make the appointment.
Lower East Side credit union CEO Linda Levy said that upon taking office, Mulvaney announced he would be reexamining agency policies. She said that the changes in policy would harm her credit union.
However, Gardephe said that a mere statement that the agency planned to change its policies does not constitute an actual change in policies that would hurt the credit union.
Meanwhile, Mulvaney continues to come under fire for his changes in policies regarding payday lenders. Sen. Richard Blumenthal (D-Conn.) has asked the CFPB's inspector general to investigate whether Mulvaney has a conflict of interest in dealing with payday lenders,
The acting director has said that the agency will reexamine those stringent rules. In addition, the agency has dropped an investigation of an installment lender and moved to dismiss complaints filed by other payday lenders.
Blumenthal said in a letter to agency Inspector General Mark Bialek that Mulvaney, as a Republican House member from South Carolina received more than $60,000 from the payday lending industry.
Blumenthal said that the policy changes, coupled with the campaign contributions "raise serious concerns about whether he has complied with his ethical and legal obligations."
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