Donald Trump vows to bring CFPB back to life with Mick Mulvaney

WASHINGTON: A high-stakes legal clash is unfolding over President Donald Trump’s temporary pick to run Elizabeth Warren’s favourite bank regulator, and the White House is holding its ground.

Trump on Friday said he’s naming White House budget director Mick Mulvaney to be the temporary head of the Consumer Financial Protection Bureau. The announcement came hours after outgoing CFPB Director Richard Cordray said he was tapping a deputy to run the agency on an acting basis, a move widely seen as an attempt to prevent the White House from naming a successor.

The CFPB “has been a total disaster as run by the previous Administration’s pick,” the president said on Twitter late Saturday.

“Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!” With two officials having been appointed to the same post, it’s unclear who’ll be in charge of the consumer regulator’s more than 1,000 employees when they come to work on Monday. It’s possible the dispute will play out in the courts for months until a permanent successor is named and confirmed by the Senate.

Trump’s right to make a temporary appointment was backed on Saturday by the Department of Justice, which said in a memo signed by Assistant Attorney General Steven Engel that the President “may designate an acting director of the CFPB”. A senior White House official said on Saturday that Trump is expected to decide on a permanent replacement for Cordray in the coming weeks.

Republicans are eager to start remaking the six-year-old agency, which they blame for burdening banks with unnecessary rules and have criticised as being unaccountable. Cordray and other Democrats are desperate to keep it out of the administration’s grip as long as they can.

Cordray, 58, appointed by former President Barack Obama, officially stepped down on Friday. As he exited, the former Ohio attorney general announced that his chief of staff, Leandra English, would become deputy director and thus automatically rise to serve as acting director when he left.

But there’s a legal debate over how much power Cordray has to name his replacement. The White House indicated that Trump believes he has the authority to name the agency’s interim leader using a federal vacancies law.

“The President looks forward to seeing Director Mulvaney take a common sense approach to leading the CFPB’s dedicated staff, an approach that will empower consumers to make their own financial decisions and facilitate investment in our communities,” the White House said in a statement.