Donald Trump wins political fight over consumer protection agency
A Washington court today backed President Donald Trump's choice to run a key consumer watchdog, ending a two-day standoff that could lead to looser banking regulations
A Washington court today backed President Donald Trump's choice to run a key consumer watchdog, ending a two-day standoff that could lead to looser banking regulations. The federal court in Washington ruled that Trump had the right to name his budget director Mick Mulvaney as acting director of the Consumer Financial Protection Bureau (CFPB), rather than allowing CFPB deputy director Leandra English to hold the spot.
English was selected as a temporary successor by outgoing director Richard Cordray, who had turned the six-year-old agency into a strong advocate for consumers in the wake of the 2008 financial crisis. Trump immediately named Mulvaney for the same job, sparking a legal tussle that ended up in court. The Trump administration has labelled the CFPB a failure which hurts businesses and the economy, and Mulvaney himself called it a "sick, sad joke" in a 2014 interview. The administration has also criticised it as too politically independent, saying it needs to be better- controlled by Congress.
But consumer advocates worry that the Trump administration will defang the CFPB and eliminate regulations of banks and other financial businesses. Since its start the bureau has taken action against abusive debt collections, "payday" lenders that charge astronomical interest rates, and banks and insurance companies that abuse customers, while tightening protections for mortgage borrowers.
Last year, it fined banking giant Wells Fargo USD 100 million for secretly creating at least two million bank and credit card accounts in customers' names, which allowed bank officers to earn performance bonuses and promotions. The White House cheered the decision today. The ruling "provides further support for the president's rightful authority to designate Director Mulvaney as acting director of the CFPB," said deputy spokesman Raj Shah.
Sign up for all the latest news, top galleries and trending videos from Mid-day.comSubscribe