Judge sides with Trump’s pick to take over consumer agency

WASHINGTON (AP) - President Donald Trump scored a victory Tuesday when a federal judge refused to block the president’s choice to temporarily run the nation’s top consumer financial watchdog and, for the moment, ended a two-way battle for leadership of the agency.

Judge Timothy Kelly declined to stop the Republican president from putting Mick Mulvaney in place as the acting director of the Consumer Financial Protection Bureau. In doing so, Kelly ruled against Leandra English, the bureau’s deputy director, who had requested an emergency restraining order to stop Mulvaney from becoming the acting director.

Mulvaney and English had claimed to be the rightful acting director, each citing different federal laws. The leadership crisis developed over the weekend after the bureau’s permanent director, Richard Cordray, resigned and appointed English as his successor. Shortly afterward, the White House announced that Mulvaney, currently budget director, would take over the bureau on an interim basis.

The judge’s ruling Tuesday is not the final decision in the case. But in making his decision, the judge said that English had not shown a substantial likelihood that she eventually would succeed on the merits of her case. The judge’s decision is not immediately appealable.

The judge was nominated by Trump and was confirmed by the majority-Republican Senate in September.

The Consumer Financial Protection Bureau was established after the financial crisis to make sure that customers are not being exploited and that banks are complying with the consumer protection laws on the books. Cordray, appointed by President Barack Obama, was criticized by congressional Republicans as being overzealous but was lauded by consumer advocates for aggressively going after banks for wrongdoing.

On Monday, Mulvaney said the bureau under a Trump administration would act differently than the agency under the Obama administration.

Lawyers for English will have to make a choice about how to proceed. After the hearing, a lawyer for English, Deepak Gupta, said he hopes to be able to move the case along quickly.

“I’m going to have to explore the options with my client, so I don’t know what the next step is and I’m not going to say that right now,” he said, adding options include asking the judge for a final decision on the merits of the case.

Gupta said it is not in his client’s interest or the government’s interest to have a “cloud of impropriety and uncertainty hanging over the bureau for any longer than is necessary.”

The White House said it “applauds the court’s decision,” saying it provides “further support for the president’s rightful authority to designate Director Mulvaney as acting director of the CFPB.”

Trump’s authority to install Mulvaney was backed up by Mary McLeod, the bureau’s general counsel, who wrote a memo over the weekend agreeing with the White House that Mulvaney should be recognized as acting director. The Office of Legal Counsel, which acts as a legal adviser to the president, also argued that Mulvaney, not English, was the legitimate acting director of the agency.

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Sweet reported from New York.