A federal judge hearing the case over who rightfully can lead the Consumer Financial Protection Bureau on an acting basis Tuesday denied a request to block President Donald Trump from installing Mick Mulvaney as acting director.
Cordray announced Friday that he had appointed Leandra English as the agency's deputy director, which made her the acting chief, but within hours President Trump appointed Mulvaney, the White House budget chief, to fill the post.
This is a developing story.
The CFPB was created after the financial crisis to target unfair or abusive practices by financial institutions offering consumer products, including credit cards, mortgages and loans.
"Yesterday, I spent time at the CFPB, I reviewed transition materials, and I met with members of Congress to lay out my plans for ensuring that the consumer bureau continues to fight for working families", English said in her statement. Each side claims to be in charge, a squabble that is still being sorted out in a federal court in Washington.
In doing so, Kelly ruled against Leandra English, the CFPB's deputy director. He once called the agency a "joke" and said he wished it didn't exist.
But Mulvaney, also director of the White House Office of Management and Budget, isn't just any caretaker director.
The dispute was precipitated by last week's resignation of Richard Cordray, a Democrat who has been the agency's only director since it was established in 2010 by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
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"The law says that I shall appoint the deputy director, and I did so", he said.
She is "purporting to be acting director", he said. But it may take several weeks for someone to be nominated and even months until the Senate could confirm his or her appointment.
"We need someone who can be for consumer protections but also understand how a bank operates", said Richard Hunt, CEO of the Consumer Bankers Association, a lobby and trade group for the nation's biggest retail banks.
Mulvaney spoke to reporters at the bureau late in the day Monday, which included meetings with staffers and reviewing issues now facing the bureau.
One straightforward solution to the issue of who runs the bureau is for Trump to nominate his own permanent director.
The White House has support not only from the Justice Department's Office of Legal Counsel - Assistant Attorney General Steven Engel wrote in a November 25 memo that Trump had authority to choose an acting director - but also the general counsel of the CFPB, Mary McLeod.
Because it's a final rule, rescinding it would likely require an act of Congress or a lengthy regulatory process that would send the rule back to the drawing board.