Consumer advocates file brief opposing CFPB’s Mulvaney

Five big questions about the Mulvaney-led CFPB

WASHINGTON — A group of 10 consumer advocacy groups has filed an amicus brief on behalf of former Consumer Financial Protection Bureau Deputy Director Leandra English in her suit to claim interim control of the agency.

The brief, filed Friday, argues that the court should take into consideration not only the legal underpinnings of English’s claim to the directorship of the CFPB, but also the effect on consumer protection that would result from leaving acting director and White House Ofice of Management and Budget director Mick Mulvaney in charge.

“The Court … should examine how Plaintiff English or Defendant Mulvaney would lead the CFPB,” said a group of consumer advocates in thier brief supporting Leandra English’ suit against acting CFPB director Mick Mulvaney.

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“Inattention by federal regulatory agencies, along with limitations on their authority, contributed significantly to the 2008 financial crisis,” said the brief, which was signed by Americans for Financial Reform, Public Citizen, U.S. Public Interest Research Group and the Center for Responsible Lending, among others. “Although plaintiff’s claim regards who can serve as acting director until the next Senate-confirmed director is seated, the Court … should also examine how Plaintiff English or Defendant Mulvaney would lead the CFPB.”

The brief went on to argue that Mulvaney’s approach to consumer protection is “an inherent conflict of interest with the agency’s statutory mission” and that his leadership, even temporarily, would “slow or halt execution of the CFPB’s core functions” and render the agency little more than a puppet of the White House.

The brief claims that, in creating the CFPB, the 2010 Dodd-Frank Act consolidated various consumer protection authorities that had been dispersed throughout the U.S. financial regulatory system under one roof. That action was pursued because of the stark failure of any of the agencies individually or together to foresee and stop the abuses that led to the financial crisis. Dodd-Frank also took pains to ensure that the agency was independent, to the extent practicable, of political influence.

“The Dodd-Frank Act expressly designated the agency as independent, gave the CFPB its own source of funding from the Federal Reserve, allowed the CFPB to make financial operating plans without OMB approval, and placed the agency under a single director appointed by the President and confirmed by the Senate for a five-year term, removable by the President only for ‘inefficiency, neglect of duty, or malfeasance in office,’ ” the brief said.

That independence of the agency is threatened by having Mulvaney sit atop the agency, the brief said, and the court should consider his stated goals as well as the concrete actions he has taken in his brief tenure in that role — including freezing hiring and assigning political operatives to shadow career staff — in its decision over whether his continued service is in the public interest.

“The public interest lies strongly with Plaintiff’s requested injunction because, absent the injunction, Defendants’ actions risk slowing the agency to a halt,” the brief said. “With these actions, Defendant Mulvaney is not leading the CFPB to pursue its statutory mission of implementing and enforcing consumer protection law. His goal at the CFPB is to ‘limit as much as we can what the CFPB does to sort of interfere with capitalism and with the financial services market.’ ”

English, who had served as former CFPB Director Richard Cordray’s chief of staff before being tapped as interim director by him on his last day before resigning, sued Mulvaney after the White House claimed authority to name the bureau’s interim director under the 1998 Vacancies Reform Act. A D.C. District Court judge sided with Mulvaney, though English is still pursuing her complaint in court. The court is scheduled to hear arguments in the case on Dec. 22.

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