‘Total Disaster’: Legal Standoff Looms As Trump, Warren Trade Insults Over CFPB

On Friday, we brought you an Op-Ed from Elizabeth Warren who is concerned that the CFPB is about to be commandeered by Donald Trump.

Warren’s Op-Ed was published on November 17 and it would quickly prove prescient. Here’s what Warren wrote about the impending exit of Rich Cordray:

Rich recently announced that he would be leaving the CFPB, and the question of Rich’s successor is a big test for Donald Trump. When he was Candidate Trump, he made repeated promises on the campaign trail, to “not let Wall Street get away with murder” and “stand up for the little guy.” That’s the mission of the CFPB-to stand up for American families and against Wall Street.

If President Trump chooses another industry hack or bought-and-paid-for politician to lead this agency-either on a temporary or a full-time basis-it will be an unmistakable sign that he will run government to benefit his rich buddies, not working families.

No sooner had we reprinted that Op-Ed than Cordray resigned and immediately appointed the CFPB’s chief of staff, Leandra English, as the agency’s deputy director. That was an apparent effort to block Donald Trump from naming his successor and set up a standoff with the administration.

Sure enough, just hours later, Trump said he was naming White House budget director Mick Mulvaney to be the temporary head of the Bureau.

This is an important issue and you can read all about why in the Warren Op-Ed. Suffice to say the GOP is pretty damn excited about “remaking” the CFPB as part of a broader effort to rollback regulations.

“Republicans are eager to start remaking the six-year-old agency, which they blame for burdening banks with unnecessary rules and have criticized as being unaccountable,” Bloomberg reminds you, adding that “Cordray and other Democrats are desperate to keep it out of the administration’s grip as long as they can.”

On Saturday, Trump tweeted this:

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

— Donald J. Trump (@realDonaldTrump) November 25, 2017

Warren claims that’s not at all what’s going to happen. To let her tell it, what’s far more likely is that the CFPB falls victim to regulatory capture and puts us right back on the road the very same kind of behavior that devastated the global financial system and cost Marty Bannon his fortune. Here’s are her responses to Trump:

Long story short, it isn’t completely clear what’s going to happen here. “Administration officials said they expect English to start serving as Mulvaney’s deputy on Monday [and they are] ‘hoping’ there won’t be a legal challenge to Mulvaney’s appointment, citing the President’s authority to choose him for the post,” CNN writes, describing the confusion.

In a testament to Warren’s contention that this is a bad idea, Mulvaney actually voted to kill the Bureau he is now supposed to head while in Congress.

For his part, Barney Frank had the following to offer:

We gave a lot of attention to how to structure the CFPB and how to protect its independence, because its job is to go after some very powerful forces in the economy. The point is, we intend what [former CFPB Director Richard] Cordray was doing to have this kind of autonomy.

When CNN asked Frank how Trump’s decision to appoint Mulvaney can be challenged, he said this:

This is unprecedented. I literally don’t know.

So you can see where this is going, right? Expect turbulence (and lots of Twitter battles between Trump and Warren) ahead.

Incidentally, this crossed late Saturday evening:

• DOJ CONFIRMS TRUMP CAN DESIGNATE ACTING CFPB DIRECTOR