Leandra English filed the lawsuit in U.S. District Court in Washington, naming President Donald Trump and budget director Mick Mulvaney as defendants. | M. Scott Mahaskey/POLITICO Consumer bureau's top lawyer sides with Trump in leadership clash

The Consumer Financial Protection Bureau's top lawyer sided with the Justice Department over President Donald Trump's appointment of Mick Mulvaney to lead the CFPB as a leadership battle over the controversial watchdog agency escalated.

In a memorandum obtained by POLITICO, CFPB general counsel Mary McLeod said Trump had the legal authority to name an acting director to the bureau under the Federal Vacancies Reform Act.


"It is my legal opinion that the president possesses the authority to designate an acting director for the bureau," McLeod wrote in the Nov. 25 memo to the CFPB leadership team. "I advise all bureau personnel to act consistently with the understanding that Director Mulvaney is the acting director of the CFPB."

Yet even as McLeod's memo was circulating, Leandra English, former CFPB Director Richard Cordray's choice to serve as acting director of the watchdog agency, sued the Trump administration in U.S District Court in Washington.

In her lawsuit filed late Sunday, English named Trump and Mulvaney as defendants and asked the court to establish her authority as acting director.

"Ms. English has a clear entitlement to the position of acting director of the CFPB," the filing claims. "The President's purported or intended appointment of defendant Mulvaney as acting director of the CFPB is unlawful."

Morning Money Political intelligence on Washington and Wall Street — weekday mornings, in your inbox. Email Sign Up By signing up you agree to receive email newsletters or alerts from POLITICO. You can unsubscribe at any time. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

English, who is the bureau's deputy director, is being represented in court by Deepak Gupta, a former senior counsel at the bureau. Gupta and CFPB spokeswoman Jen Howard did not respond to requests for comment. The lawsuit was filed by English in her capacity as deputy director and acting director of the CFPB.

The White House claimed victory with McLeod's memo.

"Now that the CFPB’s own General Counsel - who was hired under Richard Cordray - has notified the Bureau’s leadership that she agrees with the Administration’s and DOJ’s reading of the law, there should be no question that Director Mulvaney is the Acting Director," White House spokeswoman Sarah Sanders told POLITICO. "It is unfortunate that Mr. Cordray decided to put his political ambition above the interests of consumers with this stunt."

Cordray, an appointee of former President Barack Obama, abruptly resigned effective at midnight Friday, naming English as acting director. Hours after Cordray's announcement, the White House appointed Mulvaney, who heads the OMB, as acting director of the consumer bureau, citing the Vacancies Reform Act.

The consumer bureau's staff gathered at bureau headquarters on Sunday, but English did not attend, according to a person with knowledge of the meeting.

Mulvaney is expected to show up for work at the bureau early Monday morning.

The 2010 Dodd-Frank Act, which created the CFPB, states that the consumer bureau's deputy director shall “serve as acting director in the absence or unavailability of the director." Until Friday, when Cordray promoted English, the bureau had been operating with an acting deputy director for years. English was named to the slot just as Cordray left, replacing acting deputy David Silberman.

The Justice Department's Office of Legal Counsel on Saturday acknowledged the Dodd-Frank provision, but found that Cordray's resignation amounted to an "absence," giving Trump authority to fill the slot.

The bureau's unusual structure, which vests power in a single director with a five-year term, has been a lightning rod since its creation. Businesses have accused the agency and Cordray of regulating by fiat and litigation and argued for more transparency. They've also challenged the CFPB's constitutionality in court, in a lawsuit that could be decided within weeks or months.

Yet numerous polls have shown that consumer advocates remain strong champions of the agency's work. The bureau says it has delivered $12 billion in relief, including canceled debt and compensation, to customers wronged by banks, credit unions, payday lenders and credit card companies.

The White House has been interviewing candidates to replace Cordray, including George Mason University's Todd Zywicki, a critic of the agency.

