Credit union sues to block Mulvaney from leading CFPB

FILE PHOTO: Office of Management and Budget Director Mick Mulvaney leaves the Consumer Financial Protection Bureau (CFPB) building after a meeting in downtown Washington D.C., U.S. November 27, 2017. REUTERS/Carlos Barria

WASHINGTON (Reuters) - A federal credit union has sued to block President Donald Trump from installing Mick Mulvaney as his preferred head of the U.S. Consumer Financial Protection Bureau.

Citing “regulatory chaos” caused by the fight over who is the legal leader of the regulator, the Lower East Side People’s Federal Credit Union called on a federal court to remove Mulvaney, Trump’s budget director, and affirm Leandra English, the CFPB’s deputy director, as the proper acting head of the bureau.

The lawsuit, filed in U.S. District Court in Manhattan, represents a new legal front in an ongoing battle over who should be running the regulator.

English has insisted she should run the agency after being named deputy director by Richard Cordray, who resigned in November. But Mulvaney has been named acting director by Trump, and has announced a freeze on new regulatory work while he reviews agency policies.

English has her own lawsuit against the administration pending in federal court, but Tuesday’s lawsuit marks the first legal challenge against the administration by an entity regulated by the CFPB.

“The Credit Union does not know who is validly in charge of the CFPB, who is authorized to make the rules, or whose rules to follow,” the credit union said in its complaint.

“The Court must resolve this regulatory chaos. It must determine who is in charge of the Bureau. To the Credit Union, it is plain that Leandra English is the only lawful Acting Director in charge of the CFPB,” the lawsuit said.

A Mulvaney spokesman did not immediately respond to a request for comment.

A U.S. District Court judge last week sided with Trump and ruled against English, allowing Mulvaney to serve as the agency’s acting head. English has continued to pursue her case.

Reporting by Pete Schroeder; Editing by Jonathan Oatis