Attorney General Racine Leads 17 States in Brief to Protect Consumer Financial Protection Bureau’s Independence

Amicus Brief Says Trump’s Attempt to Control Agency Leadership Endangers Consumers

WASHINGTON, D. C. – Attorney General Karl A. Racine has filed a friend-of-the-court brief on behalf of the District and 17 states in English v. Trump, a lawsuit challenging President Trump’s decision to appoint Mick Mulvaney as the acting director of the Consumer Financial Protection Bureau (CFPB). The brief, filed in the United States Court of Appeals for the District of Columbia Circuit, argues that a lower court erred in allowing Mulvaney to become the agency’s acting director. The brief asserts that maintaining the CFPB’s independence is crucial to protecting consumers in the District and nationally, and that Congress ensured this independence by creating a specific plan for succession.

Richard Cordray was the first director of the agency, which is designed to serve as an independent consumer advocate and check on the power of large financial-services businesses. He stepped down last year and, under the act that created the CFPB, his deputy director, Leandra English, became the acting director. Trump, citing an earlier federal law, claimed that he had authority to appoint an acting director and selected Mulvaney, the director of the Office of Management and Budget. Mulvaney has been an outspoken critic of the CFPB and, while he served in Congress, voted to weaken the agency’s authority and questioned its existence. Since coming on as acting director, he has denounced the agency and sought to roll back important consumer protection laws, including rules designed to protect consumers from predatory payday lenders. Ms. English brought suit to challenge Trump’s effort.

“The Trump Administration has proven repeatedly that it cares more about big companies’ bottom lines than protecting consumers, and maintaining the CFPB’s independence is key to its purpose as an agency,” Attorney General Racine said. “We believe that the law supports Ms. English being CFPB’s acting director.”

The amicus brief, available here, argues that a lower federal court ignored important legal principles in failing to grant an injunction blocking Mulvaney’s appointment. It also says that the Trump Administration’s view – that a federal law predating the congressional act to create the CFPB allows the President to appoint an acting director – cannot be reconciled with Congress’s legislation establishing the CFPB and providing for a specific succession of leadership. “The defendants’ approach demolishes a critical part of Congress’s carefully constructed statutory scheme for the CFPB’s independence,” the brief argues. “The independence of an agency means little without independent leadership.”

Since the CFPB began operations in 2011, the agency has handled more than a million consumer complaints and returned nearly $12 billion to the pockets of more than 29 million consumers wronged by financial institutions – five times more than the agency itself costs taxpayers to fund. Among other efforts to help consumers, the CFPB has reached multiple settlements with banks, debt collectors, and other predatory lenders. Recently, partnering with several state attorneys general, the CFPB took action against several predatory for-profit colleges, forcing them to pay restitution to consumers the schools lured in with unrealistic promises of a degree and gainful employment.

Attorney General Racine led the brief’s drafting. The attorneys general of California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington state also joined the brief.

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