December 1, 2017 / 5:08 PM / 16 days ago

U.S. consumer financial watchdog official defies Trump from within agency

WASHINGTON (Reuters) - Two days after a federal court endorsed President Donald Trump’s deregulatory pick for a consumer watchdog, a rival official was encouraging agency staff to keep up the pressure on the lending industry, several current and former officials said on Friday.

Leandra English, the deputy director of the Consumer Financial Protection Bureau (CFPB), is suing Trump for the right to lead the agency. She wants the bureau to follow through on “several enforcement actions in the pipeline” targeting companies that violate fair lending rules, these people said.

Trump has said the agency “devastated” lenders, and his administration is eager to lessen the power of the agency, which was conceived to halt abusive loans.

A judge on Tuesday rejected English’s argument to lead the agency, but an appeal is expected. Meanwhile, she is urging colleagues to continue policing the lending industry, said several current and former agency officials who were not authorized to speak publicly.

In an email to CFPB managers Thursday evening, English reminded them of the pending enforcement actions and said other routine reports on consumer protections are due in December.

English wrote colleagues that she wants “to be sure that these are still on track,” according to the email seen by Reuters.

She signed the email, “Leandra English, Acting Director.”

English has been active at the agency this week, said her lawyer. “She is doing the work of the bureau and looking out for its mission,” said attorney Deepak Gupta.

Mick Mulvaney, the White House budget director, has been endorsed by a federal court to lead the CFPB and he has instructed agency staff to “disregard” instructions from English.

And he is increasing his influence at the agency. A spokesman for Representative Jeb Hensarling, chairman of the House Financial Services Committee, confirmed Friday that Brian Johnson, one of his top aides, had left the committee to assist Mulvaney at the CFPB. Hensarling, a Texas Republican, is one of the CFPB’s harshest critics in Congress.

The CFPB’s last director, Richard Cordray, tapped English as his successor when he stepped down last week, a move that sparked the legal wrangling.

Cordray left behind 14 lawsuits that are ready to be filed against financial services companies, Mulvaney told the Washington Times on Thursday.

Mulvaney told the newspaper he is “combing through” those draft lawsuits now. A spokesman for Mulvaney did not immediately respond to a request for comment Friday.

One of the drafted lawsuits is against Santander bank and accuses the Spanish lender of overcharging borrowers on auto loans in the United States, Reuters has reported.

Consumer advocates and banking industry leaders have battled over the CFPB for years but both sides agree the president has the right to nominate Cordray’s full-time successor, who must be confirmed by the Senate.

Both sides also agree that English is the agency’s deputy director for the time being. The legal fight should last for weeks.

Reporting By Patrick Rucker and Pete Schroeder; Editing by David Gregorio

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