At CFPB, bitter feelings about final Cordray maneuver

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Employees at the Consumer Financial Protection Bureau are privately questioning why outgoing director Richard Cordray abruptly tapped a 34-year-old chief of staff with no enforcement, supervisory or legal experience to head the embattled agency after he resigned.

Many were caught off guard when Cordray handed the reins to Leandra English by naming her deputy director as he stepped down on Friday. The White House also appeared surprised, scrambling to officially name Mick Mulvaney, the director of the Office of Management and Budget, as interim director. English and Mulvaney have been engaged in a legal standoff since Sunday night over control of the bureau.

In interviews, several current and former CFPB officials, most of whom did not want to speak on the record, were upset by Cordray's eleventh-hour move during a holiday weekend, typically a time when the only news that is released is the kind people want to bury. They were also angry at his choice, arguing that English was not experienced enough for the job.

"It was shocking to people that English was selected," said one former CFPB employee, who spoke on the condition of anonymity. "Many people were questioning Leandra's qualifications and her experience. It's symptomatic of the environment at the CFPB where they just handpick whomever they want and this cronyism and favoritism leads to discrimination."

Little is known about English. Previously, she worked as a principal deputy chief of staff at the Office of Personnel Management, the chief of staff and senior adviser to the deputy director for management at OMB, and was a member of the CFPB implementation team at the Treasury Department during the Obama administration.

But she'd only formally served as the agency's chief of staff since January, and has never been subjected to the kind of public scrutiny that comes from holding a top-level post.

One key question was why Cordray passed over David Silberman, who had served as acting deputy director for nearly two years, in naming a full-time deputy director. Silberman kept his job as associate director of research, markets and regulations.

Cordray's move was widely panned outside the agency, with many blaming him for sowing discord at the CFPB as he left. Though Cordray has claimed he was following the Dodd-Frank Act in appointing English as acting director, the CFPB's own general counsel, Mary McLeod, disagreed.

"This was a continuation of Richard Cordray's historical practices as he went out the door to create as much chaos and conflict as he could," said Scott Pearson, a lawyer at Ballard Spahr.

Richard Hunt, the president and CEO of the Consumer Bankers Association, questioned why Cordray waited until the last minute to name a new deputy director.

"I like Leandra, I think she was a terrific chief of staff, and she did everything she could to keep the trains running on time," Hunt said. "But she has never run a government agency, never run a business and never worked at a bank. I hope she's not being used as a pawn, because certainly David Silberman was highly qualified to serve."

Democrats have rallied to English's defense, but that may not help her cause. English barely spoke at a public appearance Monday with Sen. Elizabeth Warren, D-Mass., and Senate Minority Leader Chuck Schumer, D-N.Y., that appeared awkward. Mulvaney used the appearance to accuse her of playing politics while he was at the CFPB taking control of the agency.

But Democrats have persisted in their efforts.

With paint buckets drumming in the background and CFPB employees gazing through windows and taking pictures of protesters below, Warren and Jeff Merkley, D-Ore., led a rally Tuesday with progressive groups at the bureau’s headquarters, less than a block from the White House.

“This is about Wall Street banks versus families and right now Donald Trump has put himself firmly on the side of Wall Street banks," Warren said.

The progressive groups are also hoping that a battle over the bureau can transcend bank regulation.

“The public is paying attention,” said Adam Green, co-founder at the Progressive Campaign Committee, before leading a chant: “Hey, hey, ho, ho, Mick Mulvaney has got to go!”

When asked whether the fate of the bureau will bleed into the 2018 midterm elections and become a campaign issue, Warren said, “Boy — it sure ought to be.”

“This is not about politics," Warren said. "This is about whose side you are on. Donald Trump said all during his campaign that he was going to be on the side of working people, that he was going to stand up to Wall Street, and he has done the world’s biggest U-turn."

The issue may be resolved soon. District Judge Timothy J. Kelly will hold a hearing Tuesday afternoon to resolve the leadership conflict. Many predicted that English would lose.

"She has a very tough case on the merits and the key requirement to get relief is a likelihood of success on the merits," said Andrew Pincus, a partner at Mayer Brown and former assistant to the solicitor general at the Justice Department.

While the case moves forward, Mulvaney has been attempting to further the perception that he's in control. Although he already has a Twitter account as head of the management and budget office, he created another one Tuesday describing himself as acting CFPB director.

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Law and regulation Dodd-Frank Regulatory relief Richard Cordray CFPB