President Trump, however, ignored Cordray's appointment and instead announced that Office of Management and Budget Director Mulvaney was his guy. He named English, who was his chief of staff, as the bureau's deputy director.
English's argument hinges upon the notion that the CFPB was meant to be an independent agency, and cites the 2010 Dodd-Frank Act, which created the agency. "They need to know who's in charge and whose got authority and right now they don't", he said.
The CFPB deputy's case is not the only one pending on the matter. The restriction is suspended if a nomination is pending in the Senate and the 210-day clock starts again if the Senate rejects a nomination.
"I advise all Bureau personnel to act consistently with the understanding that Director Mulvaney is the Acting Director of the CFPB", McLeod wrote in a letter to CFPB senior leaders. English then filed the motion for a preliminary injunction to block Mulvaney's appointment, and Kelly heard arguments on December 22.
The denial of the injunction request by Kelly, a Trump appointee, can be appealed to the U.S. Court of Appeals for the D.C. Circuit. He said in a statement to BuzzFeed News that they were disappointed with Kelly's decision. At the time even the CFPB's own general counsel said the law was on the President's side, but it was clear that a protracted legal battle lay ahead. "Mr. Mulvaney's appointment undermines the Bureau's independence and threatens its mission to protect American consumers".
Gupta did not say if the ruling would be appealed and did not respond to a request for additional comment.
"English has not met the exacting standard", the judge writes.
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The CFPB was created in the aftermath of the 2008 financial crisis. Mulvaney, when he was a member of Congress, expressed similar opinions about the bureau, which made consumer advocates fearful that he would undo much of what Cordray accomplished during his tenure.
Cordray announced on November 24 that he would step down effective midnight; he has since announced that he is running for governor of Ohio.
Within hours of Cordray's resignation announcement, Trump appointed Mulvaney to fill the post under the Federal Vacancies Act of 1998.
Kelly also refuted English's claim that Trump couldn't appoint someone who was already heading another executive branch, stressing that Mulvaney will only head the CFPB until Trump has appointed someone else.
English, who has been with the CFPB since its 2011 inception, subsequently lobbed a lawsuit and engaged in some public sparring with Mulvaney, a longtime critic of the bureau he now heads.
Kelly further argued that an injunction would only cause more confusion.