Acting CFPB Director Mick Mulvaney already has institutedchanges at the agency that threaten the stability of the Lower EastSide People’s Federal Credit Union, the credit union says in newcourt documents seeking Mulvaney’s ouster.

“Mr. Mulvaney’s actions in his short time in office have alreadyharmed the Credit Union, harmed its ability to plan for futurecompliance, and harmed its mission of improving the financialhealth of underserved communities,” the credit union said, indocuments filed in U.S. District Court for the Southern District ofNew York.

The credit union has filed suit contending thatPresident Trump’s appointment of Mulvaney, an outspoken critic ofthe CFPB, as interim director was illegal.

The credit union argues that Leandra English, the agency’s newlyappointed deputy director, should be running the agency under theDodd-Frank Act. However, the administration contends in this suitand another filed by English, that the Federal Vacancies Act gavePresident Trump the authority to make the appointment.

When agency Director Richard Cordray resigned, he appointedEnglish as deputy director. Cordray and English argue that underDodd-Frank, English is the proper acting director since the lawstates that the deputy serves as director when the director isabsent or unavailable.

The credit union is asking for an injunction prohibitingMulvaney from serving as director. English has filed a similarsuit.

The credit union said that as one of his first acts, Mulvaney isreevaluating certain reporting requirements under the Home MortgageDisclosure Act.

Lower East Side credit union CEO Linda Levy said that bankscomply with the Community Reinvestment Act—in part-- by depositingfunds in the credit union, which then provides services and loansto low income communities.

She said her credit union currently has about $2.5 million insuch deposits.

“Regulators rely on accurate HMDA data, among other data, toexamine banks for CRA compliance,” Levy said. Without suchdata, regulators may have difficulty in assessing banks’ CRAcompliance.

And the credit union said that Mulvaney also delayed theenactment of rules governing prepaid cards—an action that lowersthe quality of financial products available to underservedcommunities.

Some credit union members are paid by their employers throughthe use of such cards, the credit union said.

The credit union also renewed its argument that the Dodd-FrankAct requires that the deputy director of the CFPB takes over theagency in the absence of its director.

“This is neither the time nor the forum for defendants and theiramici to rewrite the statute,” the credit union stated. “They cango to Congress to rewrite the law. Under current law, when DirectorCordray made himself both absent and unavailable, Ms. English wasthe Deputy Director. That is undisputed.”

In its reply, the Justice Department reiterated its belief thatthe credit union has no standing to sue over the appointment. Thedepartment said that the credit union has not been able todemonstrate that their members will be harmed as a result of theappointment.

And the Justice Department said that the credit unionmischaracterized the CFPB’s recent HMDA announcements. Neitherpolicy changes the obligation of entities to follow HMDA. Instead, they simply change certain HMDA reportingrequirements.

NAFCU and CUNA support Mulvaney’s appointment as actingdirector. The lower east side credit union does not belong toeither organization.