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Dueling Claims About Who Is In Charge of a US Agency Lead to Lawsuit

Consumer Financial Protection Bureau Director Richard Cordray speaks in Washington, Oct. 17, 2014.

The question of who is in charge of a U.S. consumer protection agency is now the subject of a lawsuit filed in federal court, after the agency's director resigned last week and a succession battle erupted between his deputy and President Donald Trump.

Before stepping down, Richard Cordray appointed his former chief of staff, Leandra English, as deputy director of the Consumer Financial Protection Bureau (CFPB). That made her the acting director of the agency when he resigned. However, Trump announced he was appointing his budget director, Mick Mulvaney, to the post.

English argues the law that created the agency stipulates she should be the acting director following Cordray's resignation. Her lawsuit filed late Sunday asks the court to make that ruling and deny the Trump administration's claim that another law gives the president the power to name an acting director.

"The President's purported or intended appointment of defendant Mulvaney as Acting Director of the CFPB is unlawful," the lawsuit says. "The President's use of the Federal Vacancies Reform Act [FVRA] to appoint an Acting Director of the CFPB would be an obvious contravention of Congress's statutory scheme."

CFPB General Counsel Mary McLeod said in a memo Saturday that the FVRA does give Trump the power to name an acting director in this case.

"The statutory language, legislative history, precedent from the Office of Legal Counsel at the Department of Justice, and case law all point to the conclusion that the President may use the Vacancies Reform Act to designate an acting official, even when there is a succession statute under which another official may serve as acting," McLeod wrote.

A permanent director for the agency must be nominated by the president and confirmed by the Senate.

Created in response to the 2008 financial crisis, the Consumer Financial Protection Bureau is tasked with helping protect consumers in their dealings with banks, credit card and loan companies, and debt collectors.

Republicans have said the agency has too much power and unnecessarily burdens banks and credit card companies. While a member of the House of Representatives, Mulvaney was among the co-sponsors of one of the bills aimed at eliminating the agency.

Republican Senator Lindsey Graham told CNN on Sunday he thinks Trump is on "good ground" to appoint Mulvaney.

"And in terms of the agency, it's the most out of control, unaccountable federal agency in Washington," Graham said.

Democratic Senator Dick Durbin, appearing in the same interview, said the law clearly says English should be in charge.

"It's a watchdog agency," Durbin said. "Wall Street hates it like the devil hates holy water, and they're trying to put an end to it with Mr. Mulvaney stepping into Cordray's spot."