President Trump has nominated Kathy Kraninger, currently an associate director at the Office of Management and Budget (OMB), to be the permanent director of the Consumer Financial Protection Bureau
Until now, the Acting Director of the CFPB since November 2017 has been Mick Mulvaney, who also directs the OMB. It was important that the president fill this directorship with a permanent appointee. When Mulvaney was named to be Acting Director of the CFPB last November after the departure of previous director Richard Cordray, the White House assured the American people that a permanent nomination for the post would be made by January. January came and went, and so did February, March, and so on.
Furthermore, Mulvaney’s tenure at the CFPB has been an unmitigated disaster for Americans. By his own admission, Mulvaney was a fierce opponent of the CFPB and has in the past likened consumer safeguards to a “slow cancer” and called the CFPB a “sick, sad” joke. M
In the words of Rep. Maxine Waters (D-CA), the top Democrat on the House Financial Services Committe, Mulvaney has spent his time doing everything in his power to roll back consumer protections, strip the agency of its resources and prioritize Wall Street at the expense of consumers.” He has slowed or outright stalled the Bureau’s work, dropped lawsuits and investigations into abusive payday lenders, and scaled back enforcement actions.
Within the past several months alone, Mulvaney has released a plan to structurally gut the CFPB; dismantled the CFPB’s Consumer Advisory Board; and threatened to hide the CFPB’s complaint database from the public—and it’s worth noting that 19 of the 30 financial institutions with the most complaints waged against them had contributed to Mulvaney while he was in Congress. It’s clear that Mulvaney’s goal from the beginning has been to dismantle the Bureau and the many safeguards it’s been able to enact over the years to protect consumers from abuse by financial institutions. To say he was the wrong choice to lead the Bureau is an understatement. Mulvaney has chosen to spend his time changing the agency’s name. He prefers the bureau’s legal name the Bureau of Consumer Financial Protection, a negating years of work establishing the regulator as a consumer-facing brand. The sign in the regulator’s lobby was recently changed to read BCFP.
It’s disheartening, then, that the nominee Trump finally did name to lead the CFPB raises more than her own fair share of red flags. For one, Kathy Kraninger lacks any experience in the consumer protection or financial services fields. She has no proven track record on these issues, nor are her stances at all clear on consumer safeguards, penalties for financial institutions that exploit or rip off consumers, or the importance of the independence of the agency and the integrity of its structure. Add to this that Kraninger currently works under Mulvaney at OMB, and the concern seems very real that she was nominated to be Mulvaney’s puppet: that is, that Trump expects Kraninger to simply continue carrying out Mulvaney’s destructive vision of the CFPB.
Relatedly, the nomination could itself be insincere, with no actual intention of having Kraninger confirmed. Under the rules of the Federal Vacancies Act, Mulvaney’s tenure as Acting Director at the CFPB would have expired on June 22 if the president had failed to nominate a permanent director by then. Now, however, Mulvaney can continue to serve as Acting Director while Kraninger’s nomination awaits Senate confirmation or rejection. If Kraninger is rejected, Mulvaney would be allowed to serve for a second 210 day period starting on the date of the rejection—at which point Trump could repeat the same process if he wants to. In other words, Trump may have simply nominated Kraninger knowing she lacks the experience to be confirmed by the Senate in an effort to extend Mulvaney’s tenure as Acting Director of the CFPB indefinitely.
Finally, and perhaps most worrisome, Kraninger’s role in the Trump Administration’s “Zero-Tolerance Policy” on immigration which has led to the separation of thousands of young children from their parents remains chillingly unclear. In her role as associate director at OMB, Kraninger oversees seven Executive Branch agencies, including the Department of Homeland Security (DHS) and the Department of Justice (DOJ), which have been the two agencies most involved in the development and implementation of the family separation policy. U.S. Senators Elizabeth Warren (D-MA) and Sherrod Brown (D-OH) have sent a letter seeking information on Kraninger’s role in families being separated at the border. The senators request a wide range of emails and documents that may give insight into the role Kraninger played in the design or implementation of this extremely ghoulish and cruel policy. The full effects of Trump’s executive order ending the policy remain unclear, but the fact remains that it has wreaked chaos and havoc on thousands of lives.
At best, Kraninger is an unknown quantity who, in the words of Sen. Warren, has no demonstrated interest in helping carry out the CFPB’s intended purpose of protecting consumers from financial predation:
At worst, she could be something far more concerning than that: a puppet for Mulvaney to continue to set fire to the CFPB; a “sacrifice bunt” allowing Mulvaney to retain his tenure as Acting Director of the CFPB; or, most disturbingly of all, a chief architect in the Trump administration’s barbaric and appalling family separation policies.
As Kraninger’s confirmation hearings begin, it is essential that the American people get clear, definitive, transparent answers to all of these questions. If any of these upsetting possibilities cannot be ruled out beyond the shadow of a doubt, then Kraninger should be considered an unacceptable nominee to head the only federal agency devoted exclusively to enforcing consumer financial laws. Consumers deserve a champion; so far, there is little reason to believe that Kraninger has the experience or values to be that champion.