A Department of Justice office said in a memo released Saturday that President Donald Trump has the authority to name the acting head of the Consumer Financial Protection Bureau, after the departing director named his own successor.
Resigning director Richard Cordray named the agency's chief of staff, Leandra English, to the post of deputy director, setting up a clash with the Trump administration.
Hours after Cordray's resignation letter Friday, Trump announced he was appointing his budget director, Mick Mulvaney, to head the consumer watchdog agency on an interim basis.
"The President may designate an Acting Director of the CFPB," the Justice Department Office of Legal Counsel wrote in an eight-page memo released Saturday.
The Justice Department cited the Vacancies Reform Act, which it said allows the president to appoint someone temporarily to an executive agency — and it argued that the CFPB is considered an executive agency.
Under the law that created the CFPB, the 2010 Dodd-Frank rewrite of the nation's financial industry regulatory regime, the deputy director serves "as acting director in the absence or unavailability of the director."
Sen. Elizabeth Warren, D-Mass., who helped create the CFPB, said on Twitter that if there is a vacancy the deputy director becomes the acting director, and Trump "can't override that."
Warren tweeted Saturday: "this needs to be decided in the courts."
Trump’s choice of Mulaney to fill in as head of the consumer protection agency has rankled critics, as Mulvaney has long criticized the independent status of the bureau. Warren accused Trump of naming an acting director "determined to destroy the agency."
The Justice Department's Office of Legal Counsel acknowledges that the law establishing the CFPB designates the deputy director to take over but argues that "does not displace the President’s authority under the Vacancies Reform Act."