U.S. judge denies effort to stop Mulvaney from heading consumer watchdog

WASHINGTON (Reuters) - A U.S. federal judge denied on Wednesday a preliminary injunction sought by the deputy director of the Consumer Financial Protection Bureau seeking to stop White House budget director Mick Mulvaney from taking control of the agency.

FILE PHOTO: Office of Management and Budget (OMB) Director Mick Mulvaney speaks to the media at the U.S. Consumer Financial Protection Bureau (CFPB), where he began work earlier in the day after being named acting director by U.S. President Donald Trump in Washington November 27, 2017. REUTERS/Joshua Roberts

The deputy director, Leandra English, has challenged Mulvaney’s right to lead the consumer watchdog bureau, citing her endorsement by former CFPB Director Richard Cordray, an appointee of the Obama administration who stepped down in November.

English says Cordray had legal grounds under the 2010 Dodd-Frank Wall Street reform law that created the agency to name his successor until a full-time director is chosen by President Donald Trump and confirmed by the U.S. Senate.

Trump tapped Mulvaney, who also serves as director of the White House Office of Management and Budget, to lead the CFPB on an interim basis after Cordray’s departure.

“English has not demonstrated a likelihood of success on the merits or shown that she will suffer irreparable injury absent injunctive relief,” Judge Timothy Kelly, of U.S. District Court in the District of Columbia, wrote in his decision.

In November, Kelly had turned down English’s request for a temporary restraining order.

A lawyer for English, Deepak Gupta, expressed disappointment at Kelly’s decision.

“The law is clear: President Trump may not circumvent the Senate confirmation process by installing his White House budget director to run the CFPB part time,” Gupta said in a statement. “Mr. Mulvaney’s appointment undermines the Bureau’s independence and threatens its mission to protect American consumers.”

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

Mulvaney has vowed to move the CFPB away from its agenda under Democratic President Barack Obama.

The financial industry has long complained the CFPB was too aggressive in its rulewriting and enforcement and that its single director enjoyed too much power. But consumer advocates have called it a critical safeguard for Americans.

Trump has yet to name a permanent CFPB director, and Mulvaney has said he expects to be in the interim role for up to seven months.

Reporting by Eric Beech; Editing by Leslie Adler