Finance

Senate Confirms Trump Official as Consumer-Finance Regulator – The Wall Street Journal


Kathy Kraninger has worked at the Office of Management and Budget under Mick Mulvaney, the current acting director of the Consumer Financial Protection Bureau and the OMB director.


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WASHINGTON—In a party-line vote, the Senate approved Kathy Kraninger on Thursday to run the Consumer Financial Protection Bureau, giving the federal agency, which has been caught in a bitter partisan fight, its first full-time Trump-appointed leader.

Ms. Kraninger, a White House budget official with little experience in financial regulation, will succeed CFPB acting director Mick Mulvaney and is expected to continue changes he introduced easing oversight of financial companies, drawing opposition from Democrats and consumer advocates. She is a close associate of Mr. Mulvaney’s, having worked under him at the Office of Management and Budget, where Mr. Mulvaney also serves as White House budget chief.

“I think we will see more of the same that’s been happening under acting director Mulvaney,” said Dan Berger, president of the National Association of Federally-Insured Credit Unions, a trade group, adding he welcomes the prospect of  further rollbacks of financial rules. “We look forward to working with director Kraninger.”

At her July confirmation hearing, Ms. Kraninger, 43, pledged to pursue the “proper balancing of all interests,” empowering consumers to make “good choices” and markets to stay competitive. She said her top priorities included a thorough analysis of the cost of regulations on businesses and consumers, limiting government collection of consumer data and aggressive enforcement actions against “bad actors” engaging in fraudulent activities.

The Senate voted 50-49 to confirm her for a five-year term to lead the agency, with all Democrats opposing her. Sen. Thom Tillis (R., N.C.) didn’t vote.

Democrats have raised concerns about Mr. Mulvaney’s changes to the bureau, Ms. Kraninger’s lack of experience in consumer finance, and what role she might have played—as an official in charge of the Department of Homeland Security’s budget, among other agencies—in President Trump’s border policy that led to family separations.

Sen. Sherrod Brown of Ohio, the senior Democrat on the Senate Banking Committee, said Ms. Kraninger is “standing ready to be a rubber stamp of [Mr. Mulvaney’s] disastrous policies.” Ms. Kraninger, an Ohio native, volunteered for Mr. Brown while attending college.

Since Mr. Mulvaney took office in November last year, the bureau has taken 10 enforcement actions. In the final year under Obama-appointed leadership, the agency took 47 enforcement actions.

“Like all transitions, it was not always as smooth as we would’ve all liked, but the bureau has emerged stronger for it,” Mr. Mulvaney said in a statement. He also praised Ms. Kraninger for her “commitment, expertise and professionalism.”

Democrats, who will control the House in 2019, are expected to challenge decisions that they see as weakening the agency, which was a product of the 2010 Dodd-Frank financial law passed during the Obama administration and intended to be an aggressive regulator. Rep. Maxine Waters (D., Calif.), the incoming chair of the House Financial Services Committee, has said restoring a consumer focus at the CFPB is a top priority. Although Republican control of the Senate makes passage of major financial legislation unlikely, Ms. Waters can hold oversight hearings to pressure Ms. Kraninger on CFPB policy changes.

“[Ms. Kraninger] doesn’t have the leeway she would have had, had she had a Republican House,” Stephen Ornstein, an Alston & Bird LLP lawyer. “She can’t come across as a shill for the industry.”

Ms. Kraninger also inherits a divide between a leadership team that was put in place by Mr. Mulvaney and a 1,600-person staff that was primarily hired during the Obama administration.

One simmering controversy involves past racial remarks by Eric Blankenstein, the bureau’s enforcement and fair lending chief, who remains in the post. Mr. Mulvaney also drew opposition from employees, consumer advocates and some industry executives over a decision to stop routine examinations of military lenders under a law designed to protect service members from predatory lending.

Ms. Kraninger has spent most of her career in the government, starting with a stint as a Peace Corps volunteer teaching in Ukraine. She has worked at the Department of Homeland Security and on Capitol Hill as an aide to Sen. Susan Collins (R., Maine).  She was appointed to the OMB job in March 2017.

Write to Yuka Hayashi at yuka.hayashi@wsj.com

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