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The appeals court questions the double roles of the director of the consumer’s office

Mr. Mulvaney defended his actions as legal, painting himself as a humble bureaucrat and reformer. When pressured about their actions, such as facilitating the payment of payday lenders, they often invited members of Congress to review the office so that they had stricter oversight.

"I do not seek to undermine the mission of the office". Mr. Mulvaney insisted and added that he no longer wanted it to be a regulatory "black hole".

Just hours after testifying, Mr. Mulvaney unleashed a memo on the office staff that accused some within the agency of filtering the contours of a proposed $ 1 billion fine against Wells Fargo. The potential fine was reported by Reuters on Monday.

"I am extremely concerned that some of these leaks may have come from employees in the office," he wrote, according to a copy of the memo submitted by a person on the distribution list.

Mr. Mulvaney's note seemed to offer at least partial confirmation that the Reuters report was land-based, describing the leaked material as "confidential" information.

"I recognize that there may be some (a few? Many?) People who work here who are not happy that I am working here." That's fine, "Mr. Mulvaney wrote. "I also recognize that these people may be interested in undermining my leadership here, or simply looking to make me look bad."

He has instructed the inspector general of the department to investigate the leaks, he said.

Mr. Mulvaney said he did not seek to stifle legitimate whistleblowers, but added that he would "support any disciplinary action and other actions taken against any employee in the office" that was found to have disclosed information about investigations.

"The office does not play games," he concluded.

The question of Mr. Mulvaney's legal capacity to administer the consumer office derives from the 2010 Dodd-Frank Act provision that created it. The statute mandated that the office, which obtains its funds from the Federal Reserve, retain its full independence from other federal agencies, particularly the Office of Management and Budget, which oversees the development of standards for the executive branch.

The appeals court, which quickly tracked the case, is expected to launch a final decision – which could order the expulsion of Mr. Mulvaney – within the next few weeks, according to a person with knowledge of the case.

If that happens, the attorneys of the Department of Justice, who argue that Mr. Trump has the right to appoint Mr. Mulvaney under the Vacancy Reform Act of 1998, will probably appeal the case directly to the Supreme Court. .

At that time, Mr. Trump would face a difficult decision: keep Mr. Mulvaney in office under a legal cloud, pending an appeal, or replace him with another designated who would probably face a fierce confirmation fight .

"Of all the people in the government, Donald Trump chose the only person, Mick Mulvaney, who should not run the office under the law," said Deepak Gupta, attorney for Ms. English and a former lawyer for the agency. Surveillance, which was created to protect consumers from unfair or abusive practices by banks, credit card agencies and payday loan companies.

A spokesperson for Mr. Mulvaney did not immediately respond to a request for comment.

Mr. Mulvaney, who has frozen new enforcement cases since taking control of the office, must resign before June 22, according to the vacancy law. But he could remain in office if Mr. Trump appoints his successor, remaining in office until the Senate confirms a new director.

While the Republicans on the Senate Banking Committee praised their work, the Democrats were not impressed.

Senator Elizabeth Warren, the Massachusetts Democrat who helped create the office, confronted Mr. Mulvaney with examples in which he called for the abolition of the office and argued that it was clear from his leadership that he was trying to separate it.

"You've obviously enjoyed talking about how the agency will help banks a lot more than it will help consumers, and how annoying it must be to me," Warren said. "You're hurting real people to get cheap political points."

When Ms. English approached the hearing, Mr. Mulvaney spoke little on the subject while noticing that he earned a base salary of $ 212,000 per year. He said he had never met her and acknowledged that he did not know what he did all day to earn his livelihood.

"I have to be careful here, senator, because she's suing me," Mr. Mulvaney said.

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