Lower East Side People’s Federal Credit Union has filed a lawsuit against President Donald Trump and Michael Mulvaney over what they see as a violation of the constitution in Mulvaney’s appointment to head up the Consumer Financial Protecion Bureau.
For the $55 million credit union, “it is plain that [CFPB Deputy Director] Leandra English is the only lawful acting director in charge of the CFPB,” according to the lawsuit that was filed in federal Court in Manhattan.
The suit argues that the Dodd-Frank Act requires that English should remain acting director until the president nominates and the Senate confirms a new director.
“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 the credit union's CEO, Linda Levy, in a press release. “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 small Manhattan-based credit union's suit argues that Trump’s appointment has thrown financial institutions “into a state of regulatory chaos.”
Meanwhile, both CU trade groups have already recognized Mulvaney over English as acting director.
"While Lower East Side People's Federal Credit Union is not a member of NAFCU, we were surprised to see the lawsuit," said Dan Berger, president and CEO of NAFCU, in a statement. "Since the CFPB's inception, NAFCU has worked with the bureau to ensure credit unions' needs are heard. We look forward to continuing to reduce unnecessary regulatory burdens on credit unions, including regulation promulgated by the CFPB, as we outlined in a letter to interim Director Mulvaney last week."
English is also suing the president over his appointment of Mulvaney. Former lawmakers Barney Frank and Chris Dodd, who drafted the Dodd-Frank Act, teamed up to say that the CFPB’s deputy director should serve as the agency’s acting director.
“This is a naked, illegal power grab by Donald Trump to destroy an agency that helps and protects millions of ordinary Americans,” said Ilann M. Maazel, a partner at ECBA, and lead counsel for Lower East Side People's Credit Union, in the release. “The law requires Leandra English to be CFPB’s Acting Director.”
The credit union has 8,500 members and serves low-income, immigrant and other underserved communities.