Mulvaney showed up at the agency's Washington headquarters early in the morning bearing a bag of doughnuts and then firing off an email ordering the staff to disregard any orders from English. His office tweeted photos of Mulvaney taking part in office meetings and he invited in the press to announce that he had declared a temporary freeze on hiring and rulemaking.
Trump "wants me to get it [the agency] back to the point where it can protect people without trampling on capitalism," Mulvaney said.
English, meanwhile, came to the office and sent an early morning email welcoming the staff of 1,600 back from the Thanksgiving holiday and then headed to Capitol Hill, where she met with several Democratic lawmakers. She held her first public appearance before a barrage of cameras and reporters sitting alongside Sens. Charles E. Schumer (D-N.Y.) and Elizabeth Warren (D-Mass.). Barely audible, English said the lawmakers had been "very helpful."
The confusion promised to continue for at least another day after a federal judge — a recent Trump appointee — declined to rule immediately on English's request for a temporary restraining order barring Mulvaney from taking over.
English's attorney, Deepak Gupta, asked U.S. District Judge Timothy J. Kelly to rule as "expeditiously as possible" in a way that could be immediately appealed. "Everyone needs to know who is director of the bureau," Gupta said.
The standoff is quickly turning into one of the highest-profile efforts by the Trump administration to roll back the government's oversight over the financial industry. And it is bringing to a head a long-simmering partisan fight over the CFPB, an agency established in 2011 in response to the global financial crisis.
The tug-of-war left the CFPB's staff and contractors befuddled over how to proceed. Legal experts said any actions taken by either Mulvaney or English could later be challenged in court should they not ultimately prevail — effectively freezing the agency's ongoing work. The CFPB, for example, is working on rules for debt collectors, which are now likely to stall, legal experts said.
Republicans have been trying to gain control of the agency for years, complaining that the CFPB lacked accountability and its rulemaking made it harder for consumers to get loans. Republicans in Congress, for example, recently voted to block a regulation allowing consumers to sue their banks, arguing it would trigger a flood of frivolous lawsuits and drive up costs. On Twitter, Trump called the agency a "total disaster."
But Democrats and consumer advocates have cheered the CFPB's aggressive actions against big financial institutions, noting its record $100 million fine against Wells Fargo for opening millions of fake accounts consumers didn't want. The agency, they say, was intentionally created to be independent of Congress and from political pressure from the White House. Schumer said he recalled language being added to the legislation about who could temporarily replace an absent director to further limit political interference.
"We purposely put that to avoid putting a fox in charge of the henhouse," he told reporters.
The Trump administration spent months privately fuming that the CFPB's longtime director, Richard Cordray, initially did not resign like other banking industry regulators following the election, and they have recently accused him of using his office to gain political advantage. A former attorney general of Ohio, Cordray has been rumored to be interested in running for governor.
"We think that a lot of the past practices under the previous director and under the previous administration were used more to advance political ambitions and not about protecting American consumers, which is what that's supposed to be," White House press secretary Sarah Huckabee Sanders said Monday.
When Cordray did resign Friday, he set off a showdown with the White House by promoting his chief of staff, English, to deputy director, and saying that she would serve as acting director until the Senate confirmed his permanent replacement. Trump struck back a few hours later by announcing that Mulvaney would take the job instead.
Both sides spent the holiday weekend in a war of words about the fine print in dueling federal statutes. English's supporters argue that the legislation that created the agency in 2010, the Dodd-Frank Act, gave the power to appoint an acting director to Cordray. And some questioned whether Mulvaney would have the time to properly run such a large agency while also serving as the director of the Office of Management and Budget. As head of OMB, he is tasked with negotiating budget agreements with Capitol Hill. A deal must be brokered before a deadline next week to avoid a partial government shutdown. Mulvaney said he plans to work three days a week at the agency and three days at OMB.
"President Trump put a cloud over the agency by invoking a statute [to appoint Mulvaney] that doesn't apply here," said Warren, who, as a bankruptcy professor at Harvard Law School, came up with the idea for the agency. "The agency has been an effective cop on the beat, and the banks don't want an effective cop on the beat."
Schumer said Trump has nominated people devoted to terminating the agencies they were nominated to run. Mulvaney, he said, is "only the latest in a line of Trojan horse candidates."
Trump has installed new leadership at the top of several other regulatory agencies, many of which have already taken a more business-friendly tone. He is likely to follow that pattern with his eventual nominee to replace Cordray — a decision that Mulvaney said will happen quickly.
Mulvaney, a frequent critic of the CFPB, once called the agency a "joke . . . in a sick, sad way." He stood by those 2015 remarks Monday but said the concerns among some consumer advocates were overblown.
"Rumors that I'm going to set the place on fire or blow it up or lock the doors are completely false," he said. "We intend to execute the laws of the United States, including the provisions of Dodd-Frank that govern the CFPB."
At the court hearing, Mulvaney's attorney, Brett Shumate, a deputy assistant attorney general, was asked by the judge whether the government would agree that English would not be fired, to remove some of the urgency from the matter.
Shumate said he could not "give any representation or assurance on that score."
For confused CFPB employees, José Andrés, the Washington celebrity chef who once had his own legal dispute with the president over operating a restaurant in Trump's D.C. hotel, offered a respite. "Have two bosses? Please bring a proof you work there to any of our DC restaurants and the first drink is on us," he offered on Twitt er.
Steven Mufson, Spencer S. Hsu and Thomas Heath contributed to this report.