Temporary restraining order to stop Trump's pick for CFPB is denied

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A U.S. District Court judge in Washington has ruled in favor of the White House in the battle over who runs the Consumer Financial Protection Bureau.

He's a budget director in charge of what is effectively an off-budget federal agency, with the CFPB relying on transfers from the Federal Reserve System rather than annual appropriations from Congress.

U.S. District Judge Timothy Kelly, a Trump appointee, set a hearing for 4 p.m. EST (2100 GMT) on Tuesday.

Even U.S. Treasury Secretary Steven Mnuchin has publicly criticized the watchdog agency, telling FOX Business in June that over time, the White House might consider whether the CFPB should be merged with another agency.

Joining the fight on English's behalf were about two dozen current and former members of Congress who told Kelly the president's choice of his White House budget director to temporarily helm the CFPB threatened the agency's ability to operate independently as designed.

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The original director, Richard Cordray, resigned last week, but before he did, he appointed Leandra English to be the interim director. Trump responded by naming Mulvaney, triggering an unusual power struggle after English filed a lawsuit late Sunday.

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Under Dodd-Frank, the CFPB is specifically created to be an independent agency, but detractors believe that it may have become too independent.

The CFPB was created by the Obama administration in the wake of the 2008 economic crisis to protect consumers from predatory banks, lenders, and other financial bodies that could defraud people.

Republicans have sought to rein in the agency for years as part of efforts to roll back banking industry regulations, saying it is unaccountable to elected officials and harms economic growth by unfairly burdening companies. English sued, asking a judge for an order blocking Mulvaney from taking over the CFPB while the case is adjudicated. Appearing Monday night on The Rachel Maddow Show, Cordray said the "the law is clear here" that English is next in line for acting director.

Seven years after Elizabeth Warren fought a political battle to create the Consumer Financial Protection Bureau, the MA senator was on the sidewalk outside the agency Tuesday fighting for its future. "Everyone needs to know who is director of the bureau", Gupta said.

For her part, English has also carried on as the acting director, huddling with Democratic lawmakers and agency officials.

Sen. Elizabeth Warren, D-Mass., who spearheaded the creation of the CFPB, told Reuters earlier that she had "no doubt" there would be an appeal no matter which way Kelly ruled. Both the Justice Department's Office of Legal Counsel and the bureau's own general counsel have sided with the president's appointment.

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