White House defends Mulvaney's appointment to CFPB

By Elizabeth Landers, CNN

(CNN) -- President Donald Trump slammed the Consumer Financial Protection Bureau and its former director Saturday, calling the consumer watchdog "a total disaster" just hours after senior administration officials defended his decision to appoint Mick Mulvaney as its acting head.

"The Consumer Financial Protection Bureau, or CFPB, has been a total disaster as run by the previous Administrations pick," Trump tweeted. "Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!"

Trump's post spurred a series of tweets in response from Massachusetts Democratic Sen. Elizabeth Warren, an architect of the consumer agency.

"The only thing that will turn the @CFPB into a disaster is for @realDonaldTrump to ignore Dodd-Frank & name an acting director determined to destroy the agency," Warren tweeted.

On Saturday morning, the White House vehemently defended Trump's choice of Mulvaney, the current head of the Office of Management and Budget, as the consumer agency's acting director, calling it a "typical, routine move."

"We think that this move is clearly supported by a plain reading of the Vacancies' Act," a senior administration official said on a call with reporters, referring to the presidential appointment authorities outlined in the Federal Vacancies Reform Act of 1998. "The Vacancy Act is a long-established, used by presidents of both parties as a routine function, and we believe this act is consistent with that long-established practice."

Trump's decision Friday to name Mulvaney as acting director of the consumer watchdog agency came hours after the outgoing director, Richard Cordray, appointed his own successor, sparking confusion and signaling a potential showdown over who's in charge of the agency.

In a tweet Friday night, Warren said that under the Dodd-Frank financial reform law, the agency's deputy director assumes the role of acting director if there's a vacancy. Cordray named his chief of staff, Leandra English, as deputy director, which essentially establishes her as the bureau's acting director.

Trump "can't override that," Warren tweeted. The President "can nominate the next director -- but until that nominee is confirmed by the Senate, Leandra English is the Acting Director under the Dodd-Frank Act," she tweeted.

Warren added in a tweet on Saturday that the issue needed to be decided in the courts.

"If @realDonaldTrump believes he is acting legally by ignoring Dodd-Frank, he should go to court & seek a judgment right away to settle this @CFPB dispute," she wrote.

A second administration official told reporters Saturday that Trump's choice of Mulvaney supersedes the Dodd-Frank statute, which the official called a "default."

In addition, the Department of Justice's Office of Legal Counsel signed off on Mulvaney's appointment, the official said.

That office released a memorandum on the matter Saturday night, saying that while the resignation of the director would allow the deputy director to take over as acting head of the agency, that fact "does not displace the President's authority under the Vacancies Reform Act."

The office also said its interpretation of the act was in line with a federal appeals court ruling on the issue.

It remains unclear whether Mulvaney would be a permanent appointee to the position, which he said he would hold in addition to his role as the head of the Office of Management and Budget. The administration officials said the President would name a permanent head of the agency "in the upcoming weeks," but they would not preview who that pick would be, saying that Trump has not yet made a decision.

A source close to Mulvaney said it was "not likely" that he would be chosen as the permanent head of the consumer watchdog agency. The job Mulvaney loves most of all in the administration is his position at the Office of Management and Budget, and it was never envisioned that he would lead the consumer agency permanently, the source said.

The administration officials said they expect English to start serving as Mulvaney's deputy on Monday. The administration is "hoping" there won't be a legal challenge to Mulvaney's appointment, citing the President's authority to choose him for the post, the first official said. But they are ready to fight for the appointment.

"We have gone out of our way to avoid an unnecessary legal battle with Mr. Cordray," the official said. "His actions clearly indicate that he is trying to provoke one."

While serving in Congress, Mulvaney voted in favor of killing the Consumer Financial Protection Bureau, which was created after the financial crisis to protect consumers and keep an eye on Wall Street.

Mulvaney and other opponents have argued that the agency has too much power, saying it installs unduly harsh regulations. He has worked alongside Trump to roll back some of the consumer agency's rules.

In his exit letter, Cordray said the consumer agency's work is vital to the US economy.

Proponents of the Consumer Financial Protection Bureau say it plays a key role in preventing big business from preying on the little guy.

"We have returned almost $12 billion to more than 30 million consumers who had been cheated or mistreated by banks or other large financial companies," Cordray wrote in the letter.

Obama angered Republicans when he installed Cordray in 2012 while the Senate was in recess, but the Senate confirmed him for a full five-year term in 2013.


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