Credit Union Accuses Trump of 'Hostile Takeover’ of CFPB
A New York credit union has filed suit in federal court accusing the Trump Administration of a “hostile takeover” of the CFPB following the resignation of agency Director Richard Cordray.
The Lower East Side People’s Federal Credit Union filed suit in U.S. District Court for the Southern District of New York contending that President Trump illegally appointed Office of Management ad Budget Director Mick Mulvaney to serve as interim director of the agency.
The suit states that the Mulvaney appointment has thrown the credit union into “regulatory chaos.”
The credit union asks that Trump be enjoined from that making that selection and that states that agency Deputy Director Leandra English is the rightful director of the agency.
When agency Director Richard Cordray resigned, he appointed English as deputy director. Cordray and English argue that under Dodd-Frank, English is the proper acting director since the law states that the deputy serves as director when the director is absent or unavailable.
However, the Trump Administration argues that under the Federal Vacancies Act, Trump has the power to appoint an interim director.
This suit is the second suit filed in connection with that appointment. English has filed one of her own contending that she is the proper interim director. A federal court has allowed Mulvaney to run the agency until that case is decided.
In its suit, the credit union states that in Mulvaney, Trump chose someone “whose mission is to destroy a bureau that protects thousands of the credit union’s members.”
According to the suit, the credit union was established in 1986 and has about 8,500 members. The institution provides financial services to low-income, immigrants and other underserved people. The credit union has about $55 million in assets.
“We support the CFPB as a protector of our low-income members’ financial rights, and fear that the appointment of an acting director beholden to the White House could result in upheaval and ultimate dissolution of this critical agency,” said Linda Levy, CEO of the credit union. “Having experienced the devastation that the 2008 mortgage crisis wreaked on our low income members, we need the CFPB to protect communities targeted by financial predators.”
“The Credit Union’s members need the CFPB to protect them against unscrupulous payday lenders, mortgage sellers, and others regulated by the CFPB," the suit states.
NAFCU President/CEO B. Dan Berger said he was surprised by the suit.
"While Lower East Side People's Federal Credit Union is not a member of NAFCU, we were surprised to see the lawsuit," said Berger. "Since the CFPB's inception, NAFCU has worked with the bureau to ensure credit unions' needs are heard.”