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30-day halt for financial watchdog agency amid lawsuit

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President Donald Trump named Mick Mulvaney, who serves as head of the White House Office of Management and Budget, as interim director of the Consumer Financial Protection Bureau. (Olivier Douliery/Abaca Press/TNS)
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WASHINGTON — Despite a lawsuit challenging his legitimacy as acting director of the Consumer Financial Protection Bureau, Mick Mulvaney moved swiftly Monday to order a 30-day halt of new regulations issued by the federal watchdog agency.

President Donald Trump appointed Mulvaney just hours after CFPB Director Richard Cordray stepped down and told staffers that Deputy Director Leandra English would automatically become the acting chief, as specified by the act creating the agency.

In a news conference held just minutes before a court hearing that could decide whether he can remain in his position, Mulvaney said “elections have consequences at every agency, and that includes the CFPB.”

“Anything in the pipeline stops for at least 30 days,” said Mulvaney, director of the White House Office of Management and Budget.

In addition to ordering a halt on new regulations, the agency is instituting a 30-day hiring freeze.

The news conference followed a morning of high drama when Mulvaney arrived at the agency carrying a large bag from Dunkin’ Donuts in hopes of smoothing over potential hard feelings given his stated opposition to the bureau’s aggressive regulatory approach. But he first had to walk past consumer advocates stationed outside the bureau’s headquarters to protest his appointment.

English greeted her colleagues with an email saying she hoped everyone had a great Thanksgiving break. The bureau veteran filed a lawsuit Sunday seeking to stop Mulvaney from taking over.

In promoting English, his chief of staff and a longtime ally, Cordray told the bureau English would serve as acting director until Trump nominated a permanent replacement and the Senate confirmed that choice.

Trump tapped Mulvaney for the acting leadership post shortly after.

John Czwartacki, an OMB spokesperson, said Mulvaney was given access to the director’s office and the staff was cooperative.

English filed suit in U.S. District Court for the District of Columbia on Sunday, challenging Trump’s appointment of Mulvaney as unlawful. She requested a temporary restraining order to block him from taking the position and declaring her the lawful acting director.

A hearing was scheduled for Monday afternoon.

Mulvaney reportedly sent an email to the bureau’s staff, telling them to “please disregard any instructions you receive from Ms. English in her presumed capacity as acting director” and encouraging them to stop by the director’s office on the fourth floor “to say hello and grab a donut.”

The White House said Sunday night that the president had the authority to appoint Mulvaney to serve as acting director until a permanent choice is nominated and confirmed by the Senate.

The bureau’s general counsel, Mary McLeod, sent a memo to the bureau’s senior leadership team Saturday that it was her opinion Trump has the authority to appoint an acting director.

But that position is disputed by English and other supporters of the bureau in the high-stakes battle over leadership of the financial watchdog agency that started when Corday submitted his formal resignation Friday.

The Dodd-Frank Act, which created the agency in 2010, specifically states the deputy director shall “serve as acting director in the absence or unavailability of the director.”

But just hours after Cordray’s move, Trump named his own acting director under the Federal Vacancies Reform Act of 1998.

Trump’s appointment of Mulvaney under the vacancy law allowed the president to designate someone who already has been confirmed by the Senate to perform acting duties.

Mulvaney would remain as OMB director while also overseeing the consumer bureau until a permanent director is confirmed and sworn in.

Senior Trump administration officials said the 1998 law superseded the Dodd-Frank provision.

Former Rep. Barney Frank, the co-author of the law, said Monday that the intention was for the deputy director to become the bureau’s acting chief.

“We knew this is a very tough job this agency has politically. To do its job, we wanted to give it as much insulation as possible from the political process,” Frank said. If the intention had been for the Vacancies Act to dictate the process, lawmakers wouldn’t have included the provision in Dodd-Frank, he said.

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