CFPB leadership in question as two acting directors claim the role

Inside Subprime: November 28, 2017

By Andrew Tavin

The resignation of Consumer Financial Protection Bureau director Richard Cordray has left the Bureau in disarray. While Cordray’s tenure as head of the CFPB was distinguished by financial regulation that rankled predatory financial institutions, as well as much of the Republican Party and the current administration, it now seems the CFPB’s days of holding big businesses accountable for their actions may be coming to an abrupt halt. It was always assumed that, if Cordray’s replacement was chosen by the president, the organization would likely take a different (read: completely hands off) approach to regulation going forward.

Presumably that’s why Cordray named Leandra English, his chief of staff, to be acting director in his stead. But President Trump decided to ignore Cordray’s directive, and appointed Mick Mulvaney, a former congressman and current director of the Office of Management and Budget, as acting director instead. Mulvaney had previously said he wished the CFPB didn’t exist, referring to it as “a joke.” As reported by the Washington Post, this move has created a legal and inter-office showdown, with Mulvaney and English now feuding for the title of acting director. 

English filed a lawsuit on Sunday, claiming that she is the rightful acting director of the organization. Monday morning, the battle transitioned from national to office politics, as the dueling directors faced off in a manner that, if it wasn’t for the very real consequences disadvantaged American consumers may be facing, could almost make for an episode of “The Office.”

English sent an email to the agency stating she hoped everyone at the Bureau had a good Thanksgiving. She signed the email as “Acting Director.” Mulvaney responded by sending out his own e-mail, instructing CFPB employees to disregard English’s e-mail and any instructions she might try and give as acting director, claiming that he was the rightful acting director. He followed up by bringing Dunkin’ Donuts to work, perhaps hoping to ingratiate himself with the staff, and his spokesman then tweeted out a picture of the nearly empty donut box.

There will likely be a level of uncertainty as the conflict continues. Alan Kaplinsky, a lawyer with the firm Ballard Spahr, explained to the Post how that uncertainty will make things difficult for financial companies dealing with the CFPB: “Are you settling it with Mulvaney? Are you settling it with English? It’s going to create absolute chaos. You are not going to be able to settle anything.”

Whether or not you see that as a bad thing likely depends on your views of the CFPB up until this point. If you believe the Bureau has been hurting American business with heavy-handed regulation, then this director showdown represents a blockade to the new direction Trump would like to see for the CFPB. If you believe the CFPB regulation has been on balance and a force for good, then this is still a blockade in Trump’s agenda, though a welcome one.

One thing’s for sure: only one person can win this directory duel, be it through legal means or by placating the CFPB staff with an increasingly decedant assortment of baked goods. If English is really in this fight, she might consider hitting up one of D.C.’s fancier donut places tomorrow morning – we hear District Doughnut is worth a try!  

To learn more about the CFPB, check out these recent articles from OppLoans:

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