Senate Confirms CFPB Director with no Background in Consumer Issues
Inside Subprime: Dec 19, 2018
By Aubrey Sitler
Earlier this month, the Senate voted 50-49 along party lines to confirm Kathleen Kraninger as the director of the Consumer Financial Protection Bureau (CFPB), despite her limited in issues related to consumer finance. Kraninger will now hold immense power as she leads the financial watchdog agency responsible for reining in the nation’s predatory financial industries, including those offering payday loans, title loans, cash advances, and other bad credit loans and financial products.
Kraninger will replace interim director Mick Mulvaney, who stepped in to replace Richard Cordray upon his resignation in 2017. Mulvaney simultaneously served as director of the White House Office of Management and Budget until December 14, when he was appointed acting White House chief of staff.
Karl Frisch, executive director of Allied Progress, is one of many industry advocates who have expressed concern over Kraninger’s confirmation: “Kathy Kraninger has no record of consumer protection or holding big banks, predatory lenders, and other financial scammers accountable. She has repeatedly refused to answer even the most basic questions about her record… [or] to offer her views on pressing consumer financial issues… The mission of the CFPB is far too important to be put in the hands of someone who lacks candor and experience at such a fundamental level,” said Frisch.
Leading up to her new role, Kraninger oversaw a $250 billion budget spanning seven federal departments as the associate director for general government programs at the Office of Management and Budget (OMB).
The Trump administration announced Kraninger’s nomination in June, and deputy White House press secretary Lindsay Walters defended the choice in a statement: “As a staunch supporter of free enterprise, [Kraninger] will continue the reforms of the Bureau initiated by Acting Director Mick Mulvaney, and ensure that consumers and markets are not harmed by fraudulent actors.”
The idea that Kraninger would continue running the CFPB along the same vein as Mulvaney indicates that she will likely continue to undermine the Bureau’s intended regulatory role. Under Mulvaney’s leadership, the CFPB’s activity level has decreased significantly. It has abandoned many consumer-protection projects and lawsuits, delayed new regulations on the payday loan industry and disbanded multiple advisory boards.
Unsurprisingly, Kraninger’s confirmation has been greeted with polar opposite reactions from Democrats, who value the CFPB’s role in protecting consumers, and Republicans, who have loathed the CFPB since its inception.
Sen. Elizabeth Warren (D-Mass.), who originally proposed and helped to design the CFPB, strongly opposed Kraninger’s confirmation, calling into question both her qualifications and intentions on the Senate floor in late November: “It isn’t Ms. Kraninger’s management experience that got her a giant promotion, it’s her enthusiasm for Mick Mulvaney’s anti-consumerism agenda that earned her this reward from President Trump.”
Meanwhile, chairman of the House Financial Services Committee Rep. Jeb Hensarling (R-Tex.) lauded Kraninger’s confirmation in a statement: “I am confident that with her experience and knowledge of budget management, Kathy will excel as Director of the Bureau.”
The degree to which Kraninger’s priorities align with Mulvaney’s remain to be seen but will become quickly apparent in the coming months.