01:54 - Source: CNN
What you need to know about the CFPB

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The case is over who rightfully can lead the Consumer Financial Protection Bureau

Dual appointments led to a showdown

Washington CNN —  

A federal judge hearing the case over who rightfully can lead the Consumer Financial Protection Bureau on an acting basis Tuesday denied a request to block President Donald Trump from installing Mick Mulvaney as acting director.

At a hearing Tuesday evening at the US District Court in Washington, DC, Judge Timothy Kelly ruled that he will not issue an emergency order blocking Trump from installing Mulvaney in the post.

The hearing was in response to a lawsuit filed over the weekend challenging Trump’s authority to appoint Mulvaney as the acting director of the bureau following the resignation of Director Richard Cordray. Trump named Mulvaney, his director of the Office of Management and Budget, the head of the agency shortly after Cordray appointed Leandra English. The dual appointments led to a showdown over who would take charge of the federal watchdog and fraud protection agency, which was created after the financial crisis to protect consumers and keep an eye on Wall Street.

The bulk of Kelly’s decision was based on his assessment that the plaintiff did not meet the burden for success on the merits, the judge said.

The judge ruled that the plaintiff had not adequately demonstrated harm, and both the President and Mulvaney would be harmed if the appointment was not allowed to stand.

“There’s never been a time that she was accepted by the bureau as the acting director,” the judge said of English.

White House spokesman Raj Shah told reporters in a statement Tuesday that the administration “applauds the court’s decision, which provides further support for the President’s rightful authority to designate Director Mulvaney as acting director of the CFPB.”

“It’s time for the Democrats to stop enabling this brazen political stunt by a rogue employee and allow acting Director Mulvaney to continue the Bureau’s smooth transition into an agency that truly serves to help consumers,” he said.

“We are pleased with the court’s decision to deny the request for a temporary restraining order, finding that the plaintiff had not shown a substantial likelihood of success on the merits,” said Lauren Ehrsam, a Department of Justice spokesperson.

Outside of the courtroom Tuesday, English’s attorney told reporters he and his client have options to consider: “We could file a preliminary injunction, or we could file an appeal or we could file a motion to end this case and take it straight to DC circuit court. This judge does not have the final decision.”

The government attorney said Mulvaney has instituted a regulatory freeze, so any concerns about him upending the status quo are unfounded, and the agency under him will continue to enforce the Dodd-Frank law.

Both Mulvaney and English were present at the CFBP on Monday morning. Mulvaney was given full access to the CFPB director’s office with “full cooperation” from its staff, a senior White House official told CNN, adding that the OMB director brought doughnuts for his new staff. English, according to a source familiar with the matter, also was present at the bureau Monday morning, but it was not immediately clear if she and Mulvaney interacted. Mulvaney’s communications director tweeted a photo of his boss “hard at work” in his new position.

In their court filing, attorneys for English argue she is entitled to the position under the Dodd-Frank Wall Street reform law, which created the agency and says the deputy director becomes acting director when the agency’s top spot is vacant.

CNN’s Greg Wallace, Laura Robinson, Sophie Tatum and Laura Jarrett contributed to this report.