Trump takes control of consumer watchdog agency
The Trump administration won a legal struggle over control of the Consumer Financial Protection Bureau this week, after a federal judge denied a request from an Obama-era holdover to block the White House from appointing an interim head for the watchdog agency. The fight erupted after Obama appointee Richard Cordray, who has been the CFPB’s sole formal director since its inception in 2011, resigned last week and said his deputy, Leandra English, would serve as acting director until the Senate confirmed his replacement. The Trump administration struck back hours later, naming White House budget director Mick Mulvaney as acting director of the agency, which aims to protect consumers from exploitation by banks and other financial firms. English then filed a lawsuit to stop Mulvaney’s appointment, arguing that the Dodd- Frank Act that established the agency gave Cordray sole power to name an acting director.
Federal Judge Timothy Kelly sided with Trump, ruling that the 1998 Federal Vacancies Reform Act gives the White House the authority to appoint a replacement. English is expected to appeal. Republicans have long criticized the CFPB, claiming its rules hobble bank lending and hurt investment and job creation. The CFPB is “a total disaster” that has “devastated” financial firms, Trump tweeted. “We will bring it back to life!”
What the columnists said
There was never any doubt who would win this legal tussle, said Philip Wegmann in the Washington Examiner. “Basic jurisprudence reinforced by common sense makes it absolutely clear that presidents get to name temporary directors.” But English and her Democratic allies sought to portray the rightful exercise of presidential power as a dastardly conspiracy. Mulvaney now needs to clean up an agency that has acted as little more than a “protection racket,” said Ben Shapiro in NationalReview.com. Under Cordray, the CFPB repeatedly shook down firms for millions of dollars to boost its coffers. And this watchdog was often asleep on the job: It hit Wells Fargo with a $185 million fine for opening millions of unauthorized bank and credit accounts only after the Los Angeles Times exposed the years-long fraud.
Republicans loathe the CFPB because it has been so successful, said Doyle McManus in the Los Angeles Times. Since 2011, the agency has returned nearly $12 billion to Americans wronged by banks, blocked abusive debt collection practices, and reformed mortgage lending. “This record has had banks, their lobbyists, and their representatives in Congress howling.” Mulvaney—an anti-regulation zealot who once called the CFPB a “sad, sick” joke—can now fulfill Wall Street’s dream of crippling the agency.
This battle is far from over, said Margaret Hartmann in NYMag.com. Yes, Mulvaney imposed a freeze on hiring and new agency actions, and he could end investigations and turn harsh penalties into “slaps on the wrist.” But any attempts to roll back the agency’s core financial regulations will be challenged in court by consumer advocates. “Ultimately the CFPB’s fate may be determined by Trump’s fraught relationship with the judiciary.” ■