Battle for control of financial watchdog agency heads to court

27 Nov 2017


The battle for leadership the federal government's top consumer financial watchdog agency, after its head Richard Cordray resigned on Friday will now go to court. (See: Rival appointments to head Consumer Financial Protection Bureau create confusion).

The fight, which last night got sharper, increases the uncertainty over the fate of the Consumer Financial Protection Bureau (CFPB), a regulator set up following the financial crisis that hit global economy nearly a decade ago.

According to commentators, the dispute stemmed from two visions of how the US financial system could be run, as president Trump moves to dismantle the regulation regime created under the Obama administration to rein in the financial industry.

The bureau was created six years ago, under President Obama to regulate providers of a range of financial products, including mortgages, credit cards, bank accounts and student loans.

Leandra English, the bureau's deputy director who was set to become its temporary chief, filed a lawsuit late last night to block Trump's choice of successor at the agency, from taking control on this morning.

The deputy director of the Consumer Financial Protection Bureau filed a lawsuit against President Trump, in an attempt to block his nominee from taking temporary control of the agency as its acting head.

Trump has been seeking to install his budget director, Mick Mulvaney, as the agency's acting director. Trump tweeted that the bureau had been a ''total disaster'' and needed new leadership to ''bring it back to life.'' Mulvaney is known for his strong views on the consumer bureau, and had called it a ''sad, sick'' joke. He is also in favour of legislation to eliminate it.

The lawsuit filed in the US District Court for the District of Columbia seeks to halt the appointment of Mulvaney. Mulaveny serves as head of the Office of Management and Budget and is also named in the lawsuit.

According to commentators, English's move marked a stunning turn of events at the agency, which was created after the financial crisis to protect consumers and keep an eye on Wall Street.

According to Mulvaney, the agency has too much power and issues unduly harsh regulations.

Over the years, the bureau has recovered around $12 billion in refunds for excessive charges  29 million consumers.

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