Lower East Side People's Federal Credit Union Sues Trump over CFPB Appointment
In December, the Lower East Side People’s Federal Credit Union in New York, NY, sued President Donald Trump in federal court. The credit union’s lawsuit challenged Trump’s appointment of Michael Mulvaney as director of the Consumer Financial Protection Bureau (CFPB). At the time, Leandra English had already been appointed director of the independent federal agency by Richard Cordray, who resigned from the position last November.
The agency’s governance purposefully separates the president from its leadership to prevent corruption. Trump’s appointment of Mulvaney was illegal, according to the CFPB’s founding documents.
Congress created the CFPB in 2011, three years after the financial crisis began, to act as a check against predatory, abusive practices in the financial industry.
Mulvaney has previously called the CFPB a “sad, sick joke.”
“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,” say Linda Levy, CEO of the credit union. “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.”
Unfortunately, in February, a federal judge dismissed the credit union’s lawsuit stating that it did not have the authority to sue and had not proven any “demonstrable impact” to its mission and operations from Mulvaney’s leadership.
However, English has her own lawsuit pressing for Mulvaney’s removal pending in federal court. Recently, a district court judge sided with Mulvaney, but English is pressing forward with an appeal to hold onto her appointed position.
Green America campaigned for the creation of the CFPB to prevent the financial crisis from happening again. We continue to oppose the Trump administration’s efforts to cut the CFPB, including the agency’s authority to enforce civil rights in lending.
So will the credit union, says Levy: “We will continue to work for strong regulations to prevent predatory lenders, regardless of what happens to the CFPB in the coming months. As a mission-driven credit union, the financial health of our members is always our top priority.