The Washington PostDemocracy Dies in Darkness

Trump nominee to lead consumer watchdog agency passes key Senate hurdle

Kathleen Kraninger is President Trump's nominee to be the director of the Bureau of Consumer Financial Protection. (Manuel Balce Ceneta/AP)

The Senate advanced Kathy Kraninger’s nomination to lead the Consumer Financial Protection Bureau in a key procedural vote Thursday, putting her one step closer to taking control of the polarizing consumer watchdog.

The chamber voted 50 to 49, along party lines, to advance Kraninger’s nomination. A final confirmation vote could come as early as next week.

If confirmed, Kraninger would replace the bureau’s acting director, Mick Mulvaney, who is also the White House budget chief and Kraninger’s current boss. She is expected to continue Mulvaney’s efforts to curtail the powers of the agency, which has long been criticized by Republicans as too aggressive.

The CFPB was born in response to the global financial crisis to police the way banks manage mortgages, credit cards, payday loans and other financial products. As its director, Kraninger would become one of the country’s most powerful banking regulators.

Trump administration strips consumer watchdog office of enforcement powers in lending discrimination cases

Her nomination took much of Washington by surprise. Kraninger has decades of experience in homeland security, including helping set up the Department of Homeland Security after Sept. 11, 2001, but she has no record as a financial regulator. She has been the associate director of general government at the Office of Management Budget since 2017.

“Ms. Kraninger has had a distinguished career in public service ... and brings significant leadership experience at federal agencies and on Capitol Hill," Sen. Mike Crapo (R-Idaho), chairman of the Senate Banking Committee, said before the vote Thursday.

But without a deep understanding of the history and complexity of consumer finance, Kraninger could become a puppet for influential financial groups, Democrats and consumer groups who oppose her nomination argue.

“She has never — I repeat, never — worked on consumer protection issues, either in public service or in the private sector. She has zero track record of standing up for consumers,” said Sen. Elizabeth Warren (D-Mass.), who came up with the idea for the watchdog agency and has been among its biggest supporters in Congress.

“We have a lot of hard decisions to make in this body. But this one is a no-brainer. Hard-working American families deserve a fighter as the director of the CFPB,” Warren said before the vote.

Democrats have also questioned whether while working in the White House’s budget office Kraninger helped craft the administration’s “zero tolerance” immigration policy that separated families of undocumented immigrants.

At the OMB, Kraninger oversees budget requests from several government agencies, including DHS, which enforced the policy. During a July congressional hearing, Kraninger told the lawmakers she had played no role in “setting the policy” but repeatedly refused to answer questions about whether she had supported it or helped implement it.

The White House and Republicans have defended Kraninger, arguing that her management experience made her a good choice for an agency. She also received a lot of support from industry groups who have complained for years about the CFPB’s tactics, including pursuing costlier fines than other banking regulators.

With Kraninger in control of the CFPB, there is likely to be a “a dramatically diminished enforcement profile” and a “structural softening" of some of its most controversial rules, Isaac Boltansky of Compass Point Research & Trading said in a research note earlier this week.