A new federal lawsuit says President Trump’s “plainly illegal” appointment of Mick Mulvaney to be acting director of the Consumer Financial Protection Bureau must be reversed in favor of Leandra English, who also claims the title.
The lawsuit filed by a credit union Tuesday in New York City expands the legal fight from Washington, where a Trump-nominated judge dealt an early defeat to English, who also is suing.
“Mr. Mulvaney has no more right to lead the agency than Santa Claus,” the Lower East Side People’s Federal Credit Union alleges in its lawsuit.
The lawsuit says that “Donald Trump decided to violate the law” by appointing Mulvaney, and that “[n]ow, with Mr. Trump over his shoulder, Mr. Mulvaney is trying to destroy [the bureau].”
Ilann Maazel, an attorney for the Lower East Side People’s Federal Credit Union, told the Washington Examiner that the credit union is suing because of the feared effect of Mulvaney policies.
Maazel said the credit union serves low-income people who could be negatively impacted by payday lending, which the CFPB targeted during the Obama administration. He said there’s also concern about “regulatory chaos because he shouldn’t be there.”
“The credit union is regulated by the CFPB but we now have an acting director who is there illegally,” Maazel said. “We want the law followed. The president did a hostile illegal takeover of the CFPB.”
The legal dispute centers on whether the 2010 Dodd-Frank financial reform, which set up the CFPB, makes the deputy director the acting director if there’s a vacancy, or whether the older Federal Vacancies Reform Act gives the president that power.
Trump’s right to appointment Mulvaney on Nov. 25 is supported by the Justice Department’s Office of Legal Counsel and the CFPB’s general counsel. His leadership appears to have been accepted by bureau leadership, though English has sent several emails to CFPB staff describing herself as its leader.
Progressive groups support English’s claim, concerned that longtime CFPB critic Mulvaney will roll back regulatory efforts.
U.S. District Judge Timothy Kelly sided with Mulvaney in an initial ruling, finding that English had not demonstrated a substantial likelihood of success with her legal claims.
The credit union lawsuit allows for additional judicial input.
As in English’s case, the credit union argues Mulvaney cannot lead an independent agency because he also is a White House official as director of the Office of Management and Budget.
At the helm of the CFPB, Mulvaney temporary froze hiring and new regulations. He told reporters that campaign contributions he received from the payday lending industry will not affect his judgment and that he plans to remain acting director for up to 7 months.
Maazel said he hopes the lawsuit will be in court next week to force a quick resolution.
English lost an initial request for a restraining order and Kelly declined to fast-track the case for immediate appellate review. The next hearing in that case is Dec. 22, where English will request a preliminary injunction.
A spokesman for Mulvaney did not immediately respond to a request for comment on the new lawsuit, nor did English’s attorney, Deepak Gupta.
