Consumer Financial Protection Bureau building in Washington, D.C. June 4, 2013. Republicans and the banking industry have complained that the agency, created in reaction to the global financial crisis, lacks accountability and that its rulemaking made it harder for consumers to get loans.
"For six years, this agency has fought to give consumers a chance".
In doing so, Kelly ruled against Leandra English, the CFPB's deputy director, who had requested an emergency restraining order to stop Mulvaney from becoming the acting director. The White House could leave Mulvaney as acting director for months, or longer, they say, before nominating a permanent replacement.
The CFPB, created in the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, has been criticized as being unconstitutional and lacking proper oversight.
In denying English's request for a temporary restraining order, U.S. District Judge Timothy J. Kelly acknowledged that the case raised consitutional issues that would have to be resolved in further legal action. Gupta said that English had received emails from Mulvaney reprimanding her - he did not provide details about those messages - and that there was concern that her job could be in jeopardy, even though there hadn't been any direct threat of firing.
The CFPB's former acting director Richard Cordray, an Obama-era holdover, had claimed that English was the rightful successor to the position.
That procedure is the Federal Vacancies Reform Act, which allows the president to make temporary appointments to key federal posts when there's an opening.
Appointing Mulvaney, a "sitting White House official" and an outspoken critic of the bureau, to lead the agency would run counter to Congress's intent and explicit provisions, Gupta said. Appearing Monday night on The Rachel Maddow Show, Cordray said the "the law is clear here" that English is next in line for acting director.
Most of the regulations under Cordray are already finalized, including one pending in front of Congress regarding payday lending.
President Trump will soon nominate someone to take over as the full-time director, and English will probably be asked to step down as the administration seeks to change the direction of the bureau.
She is "purporting to be acting director", he said. Mulvaney was given full access to the CFPB director's office with "full cooperation" from its staff, a senior White House official told CNN, adding that the OMB director brought doughnuts for his new staff.
The CFPB has been working on rules for the past few years to address bank overdraft fees and the tactics used by debt collectors.