Leandra English, Richard Cordray’s personally chosen successor to head the Consumer Financial Protection Bureau, has responded to President Donald Trump’s appointment of longtime CFPB critic (and current White House Budget Director) Mick Mulvaney to head the Bureau by filing suit against Trump and Mulvaney, according to court documents filed November 26.
Here’s what you need to know:
1. English’s Lawsuit Calls for a Temporary Restraining Order to Prevent Mulvaney From Taking Over
The nine-page court filing lists Leandra English, the CFPB’s “Deputy Director and Acting Director,” as plaintiff against Donald John Trump “in his official capacity as President of the United States of America” and John Michael Mulvaney “in his capacity as the person claiming to be acting director of” the CFPB, and seeks declaratory and injunctive relief as well as an emergency temporary restraining order.
English cites the Dodd-Frank Act, which created the CFPB in 2010, and says that when Richard Cordray’s resignation as CPPB director became official at midnight on Nov. 24, English, formerly the CFPB’s Deputy Director, became the agency’s acting director as mandated by Dodd-Frank, which says that the Deputy Director “shall … serve as the acting Director in the absence or unavailability of the Director,” and that the Deputy Director shall serve as acting director until the president appoints a new director, and the Senate confirms it.
After quoting or paraphrasing the relevant portions of Dodd-Frank, English’s suit goes on to say:
Disregarding this statutory language, President Trump issued a press release on the evening of November 24 indicating his desire to install defendant Mulvaney, the Director of the White House Office of Management and Budget, as the Bureau’s Acting Director. Under this scenario, Mr. Mulvaney would seek to serve indefinitely as the interim head of a statutorily “independent” agency while simultaneously occupying his current White House post.
The suit later requests “a temporary restraining order to prevent the defendants from appointing, causing the appointment of, recognizing the appointment of, or acting on the appointment of an Acting Director of the Consumer Financial Protection Bureau via any mechanism other than that provided for by” current law.
2. The White House Might Have Issued a Veiled Threat Against English if she Shows up for Work at the CFPB on Monday
On Sunday afternoon, only a few hours before English filed suit later that evening, Bloomberg News political reporter Sahil Kapur took to Twitter to note that “someone’s going to have to walk into CFPB tomorrow and say they’re in charge and make some decisions. We still don’t know who that’ll be.”
Kayla Tausche, the Washington correspondent for CNBC, retweeted Kapur and added: “I put this exact question to a senior WH official, whose answer was – unsurprisingly – Mick Mulvaney. And that, if English were to assume the reins, she’d be acting without authority.”
Some observers viewed this as a veiled threat against English. CNBC’s Christina Willkie noted “WH sends an implicit warning to CFPB Acting Dir. Leandra English that she could be in violation of laws (although WH is not sure which ones) if she goes in to work tomorrow and does Acting Dir. job.”
On Saturday, the day after Cordray’s resignation became official and a day before English’s suit, Trump tweeted that “The Consumer Financial Protection Bureau, or CFPB, has been a total disaster as run by the previous Administrations pick. Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!” and “Check out the recent Editorial in the Wall Street Journal @WSJ about what a complete disaster the @CFPB has been under its leader from previous Administration, who just quit!”
The White House has also said it expects Mulvaney to show up for work at the CFPB.
3. The Justice Department and the CFPB’s Top Lawyer Sides With Trump Against English
As news of English’s lawsuit broke late on Sunday evening, Politico reported that it had obtained a memorandum which Mary McLeod, CFPB’s general counsel, had written the day before, siding with Trump against English. “As General Counsel for the Bureau, it is my legal opinion that the President possesses the authority to designate an Acting Director for the Bureau,” McLeod wrote in the Nov. 25 memo addressed to CFPB’s leadership team. “I advise all Bureau personnel to act consistently with the understanding that Director Mulvaney is the Acting Director of the CFPB.”
White House spokesperson Sarah Huckabee Sanders responded to news of the memo by telling Politico that “Now that the CFPB’s own General Counsel – who was hired under Richard Cordray – has notified the Bureau’s leadership that she agrees with the Administration’s and DOJ’s reading of the law, there should be no question that Director Mulvaney is the Acting Director.”
Also on Saturday, the Justice Department released a memo saying Trump has the authority to name the acting head of the CFPB, before a permanent one can be appointed and confirmed.
However, Senator Chuck Schumer said that “The process for succession laid out in Dodd Frank is clear: Leandra English, not Mick Mulvaney, is the acting dir of @CFPB. By attempting to install Mr. Mulvaney as director, the Trump admin is ignoring the established, legal order of succession that we purposefully put in place.”
Senator Elizabeth Warren made a similar observation : “The Dodd-Frank Act is clear: if there is a @CFPB Director vacancy, the Deputy Director becomes Acting Director. @realDonaldTrump can’t override that” and “.@realDonaldTrump can nominate the next @CFPB Director – but until that nominee is confirmed by the Senate, Leandra English is the Acting Director under the Dodd-Frank Act.”
4. English’s Suit Disputes the Justice Department and White House Justifications for Trump’s Actions
Trump’s supporters say the legal basis for Trump’s authority to appoint an acting director (despite wording in the Dodd-Frank which gives it to Cordray as the outgoing CFPB director) is based on the Federal Vacancies Reform Act of 1998.
But English’s lawsuit disputes this, saying “The President’s purported or intended appointment of defendant Mulvaney as Acting Director of the CFPB is unlawful. The President’s use of the Federal Vacancies Reform Act to appoint an Acting Director of the CFPB would be an obvious contravention of Congress’s statutory scheme. The President’s interpretation of the FVRA cannot be reconciled with Dodd-Frank’s mandatory language. Where the two statutes conflict, Dodd-Frank controls as the later-enacted, more specific statute.”
In other words, the suit is saying, the Vacancies Reform Act gives the president authority to appoint an acting director if no other mechanism for making appointments is specified. But Dodd-Frank does offer a mechanism for this (having the outgoing director appoint a replacement), and Dodd-Frank was enacted well after the Vacancies Act, which means the Vacancies Act does not apply to Trump’s attempt to appoint a new director after one has already been appointed.
English’s suit also includes a list of “Factual Allegations,” one of which says that “Mr. Mulvaney has never previously served in any capacity in a consumer-protection enforcement or financial or banking regulatory agency at the state, federal, or local level. Mr. Mulvaney has described the CFPB as a ‘sad, sick joke,’ has co-sponsored legislation proposing to eliminate the agency, and has said at a hearing in the House of Representatives: ‘I don’t like the fact that CFPB exists, I’ll be perfectly honest with you.'”
5. Leandra English Helped Launch the Consumer Financial Protection Bureau
Leandra English, 34, graduated from New York University and has a master’s degree from the London School of Economics. Before working for the CFPB, she worked for the Office of Management and Budget (the same agency Mulvaney currently directs) under then-President Barack Obama. She has also worked for the Office of Personnel Management.
Former director Richard Cordray appointed her the Deputy Director of the bureau on Nov. 24, the day he resigned. Before that, she had been the Bureau’s chief of staff. The day she was made Deputy Director, the CFPB put out a press release quoting Cordray as saying that she is “a seasoned professional who has spent her career of public service focused on promoting smooth and efficient operations. As deputy director, we will continue to benefit from Leandra’s in-depth knowledge of the operational needs of this agency and its staff.”
Bloomberg News’ executive profile of her also notes that she was one of the people who helped launch the Consumer Financial Protection Bureau.