The Senate just confirmed aÂ director for CFPB who has no background in consumer issues
No one had heard of Kathy Kraninger before Trumpâ€™s nomination.
The US Senate voted to confirm Kathy Kraninger as the next head of the Consumer Financial Protection Bureau (CFPB), the federal governmentâ€™s top consumer watchdog. If you havenâ€™t heard of her, donâ€™t worry â€” before she was tapped to head the agency, neither had pretty much anyone else.
Kraninger, who was confirmed by a 50-49 vote, served as associate director for general government programs at the Office of Management and Budget (OMB), overseeing a $250 billion budget across seven Cabinet departments, including the Department of Homeland Security and the Department of Justice.
She will take permanent charge over the CFPB and replace Mick Mulvaney, who became interim director of the bureau after Richard Cordray, its first director, stepped down in November 2017. Mulvaney, who is also head of the OMB, has been a controversial figure at the helm of the CFPB; critics say heâ€™s sought to undermine its mission and scale back its enforcement and oversight efforts.
Those same critics have echoed concerns about Kraninger, wondering whether sheâ€™ll continue on the same path as Mulvaney at the CFPB. They also point to her lack of experience in the consumer sector.
Thatâ€™s why Kraningerâ€™s nomination, which President Trump announced in June, has been such a head-scratcher: She doesnâ€™t appear to have much discernible knowledge of or interest in consumer protection and financial services, and she wasnâ€™t on anyoneâ€™s radar before her nomination.
Itâ€™s not all that dissimilar to Matthew Whitakerâ€™s appointment as acting attorney general after Jeff Sessions was ousted in November. Whitaker, previously Sessionsâ€™s chief of staff, had no obvious qualifications for the job other than that he appeared to be a Trump loyalist. As an OMB official in the Trump administration (and therefore also under Mulvaney), Kraninger was the loyal person for the job, if not the right person.
Karl Frisch, executive director of the consumer watchdog organization Allied Progress, said in a statement that not only does Kraninger lack the experience necessary for the job, â€œshe has repeatedly refused to answer even the most basic questions about her record or her views on pressing consumer financial issues.â€�
The CFPB has always been controversial, and especially so under Trump and Mulvaney
The CFPB was created under the Dodd-Frank financial reform and formed in 2011. Its mission is to protect consumers who are dealing with banks and taking on debt, including mortgages, student loans, and credit cards. Under its first director, Cordray, who was confirmed in 2013, the bureau by its own tally handled more than 1.2 million consumer complaints and brought about nearly $12 billion in relief for harmed consumers.
Itâ€™s been a controversial bureau since its inception, with many Republicans, including Mulvaney, citing it as an example of government overreach and claiming its single-director structure consolidates too much power in one personâ€™s hands.
Under Mulvaney, who once called the bureau as â€œsick, sadâ€� joke, the CFPB took a sharp turn in its activities. Mulvaney reportedly scaled back an investigation into the Equifax data breach, relaxed restrictions on often predatory payday lenders, and recommended Congress pursue sweeping changes to the CFPBâ€™s powers.
He disbanded all of its advisory boards and councils and went as far as to try to change its acronym to the BCFP â€” the Bureau of Consumer Financial Protection â€” a maneuver that by one estimate could cost companies $300 million. In August, the CFPBâ€™s top student loan watchdog quit, saying current leadership had â€œturned its back on young people and their financial futures.â€�
The Washington Post recently outlined how the CFPB has gotten â€œsmaller, quieter, and less activeâ€� under the Trump administration and Mulvaney: Enforcement actions are sharply down, its workforce has shrunk, and itâ€™s released fewer reports.
Kraninger overcame a lot of opposition
Kraningerâ€™s nomination was controversial, and she overcame significant opposition from progressives on a number of fronts.
Many Democrats have expressed concern with her potential involvement in the Trump administrationâ€™s â€œzero toleranceâ€� immigration policy that resulted in the separation of hundreds of children from their parents at the border. At the OMB, both the Department of Homeland Security and Department of Justice were presumably in Kraningerâ€™s portfolio. Both were involved in family separation, and Democrats pushed to find out what Kraninger knew about the issue and when.
Kathy Kraninger helps oversee the agencies that are ripping kids from their parents. Now @realDonaldTrump wants her to run the @CFPB. I will put a hold on her nomination â€“ & fight it at every step â€“ until she turns over all documents about her role in this.#FamiliesBelongTogether pic.twitter.com/wrW7oXP3Eo
â€” Elizabeth Warren (@SenWarren) June 19, 2018
Progressives have also expressed concern that Kraninger will be a sort of Mulvaney clone at the CFPB and wonâ€™t take its enforcement and oversight responsibilities seriously.
Sen. Elizabeth Warren (D-MA), who originally proposed the idea for the CFPB as a professor at Harvard, has been a fierce critic of Kraningerâ€™s nomination and raised concerns on both of those fronts and others.
â€œIt isnâ€™t Ms. Kraningerâ€™s management experience that got her a giant promotion, itâ€™s her enthusiasm for Mick Mulvaneyâ€™s anti-consumerism agenda that earned her this reward from President Trump,â€� Warren said on the Senate floor last week.
Warren noted that in Kraningerâ€™s confirmation hearing, the nominee said she couldnâ€™t identify â€œany actionsâ€� taken by Mulvaney at the CFPB â€œwith which I disagree.â€�
Given her confirmation, weâ€™ll soon find out how similar Kraningerâ€™s agenda at the CFPB will be to Mulvaneyâ€™s.