President Donald Trump named a new head for the Consumer Financial Protection Bureau just hours after departing CFPB Director Richard Cordray announced a successor. It’s unclear who will ultimately take the reins at the controversial consumer regulator.

Share story

WASHINGTON — The director of the Consumer Financial Protection Bureau (CFPB) resigned Friday and named his own successor, leading to an open conflict with President Donald Trump — who announced a different person as acting head of the agency later in the day.

That means there are two acting directors of the CFPB, when there should only be one, throwing its leadership into disarray.

Legal analysts were split over whether the White House or the CFPB had authority to name an acting director, with each side citing the fine print of dueling federal rules.

Trump proposed his White House budget director, Mick Mulvaney, as the acting director of the CFPB, which Mulvaney once called a “joke” and said he wished didn’t exist. Several defenders of the agency said they were worried that Mulvaney, if given the helm of the CFPB on a temporary basis, would gut its powers.

The series of events began earlier Friday, when the CFPB’s longtime director, Richard Cordray, said he would leave at the end of the day — instead of at the end of the month as planned — and promoted his chief of staff, Leandra English, to become deputy director.

Cordray said in a letter to CFPB staff that English would serve as the agency’s acting director until a replacement was confirmed by the Senate.

The move was widely seen by analysts as an attempt to block Trump from immediately putting a Republican in charge of the agency without Senate confirmation.

A few hours later, the Trump administration said Mulvaney, director of the Office of Management and Budget (OMB), would take over. “The President looks forward to seeing Director Mulvaney take a common- sense approach to leading the CFPB’s dedicated staff,” according to a White House statement. Mulvaney is expected to remain head of the OMB until a permanent CFPB director is nominated and confirmed by the Senate, according to the White House.

The Dodd Frank regulatory reform bill, passed in 2010, states that a deputy director will “serve as acting director in the absence or unavailability of the director.”

But legal experts said the word “unavailability” could be open to various interpretations. “The courts will likely have to resolve which interpretation is accurate,” said Mike Calhoun, president of the Center for Responsible Lending.

Others argued that the Federal Vacancies Reform Act gives the president wide latitude to appoint an acting director. “President Trump is the only person allowed to name the new head of the Consumer Financial Protection Bureau,” said Rick Manning, president of the Americans for Limited Government.

Mulvaney has been one of the agency’s toughest critics. When he was a Republican congressman in 2015, he co-sponsored legislation to get rid of the agency and said at a House hearing: “I don’t like the fact that CFPB exists, I’ll be perfectly honest you.”

Created under the Dodd-Frank bill, the agency regulates the way that banks and other financial companies interact with consumers, policing payday loans and mortgages, among other things. The CFPB has extracted billions in fines from big banks, including $100 million from Wells Fargo last year for opening millions of sham accounts that customers didn’t ask for.

“In its short years as the nation’s top consumer cop, all under Director Cordray, the young Bureau has returned $12 billion dollars to over 29 million consumer victims of financial schemes by wrongdoers ranging from Wall Street banks, mortgage companies and for-profit schools to debt collectors,” said Ed Mierzwinski, of the U.S. Public Interest Research Group.