President Trump’s pick to lead the Consumer Financial Protection Bureau faces a fierce confirmation struggle in the Senate, where liberal Democrats are preparing a campaign to block a nominee with decades of experience in homeland security but with little known record on financial regulation.
Democrats fear Kathy Kraninger, 43, is being brought in to oversee a pull back of the CFPB, continuing a path laid out by interim director Mick Mulvaney. As they fight her nomination, they have pounced on her lack of experience in financial regulation.
“I’ve not heard her make her case. Nothing I’ve seen makes me think that she should have this job, except she’s such an ally, she’s worked for Mulvaney and that tells me a lot,” said Sen. Sherrod Brown (D-Ohio), the top Democrat on the Senate Banking Committee. “She will have a challenge because it’s clear that rank-and-file Republicans want to emasculate this agency.”
Kraninger could not be reached for comment.
The nomination has become a pivot point for the fight over the future of the consumer watchdog agency.
Republicans have fiercely opposed the CFPB since it was created during the Obama administration in response to the global financial crisis — a new agency aimed at policing banks’ and other financial firms’ treatment of consumers.
Under Trump, the CFPB has fined fewer companies for misdeeds, dropped a major lawsuit against a payday lender and started reviewing major regulations, addressing Republican critics who have said the agency has historically overstepped its powers under previous leadership.
If confirmed by the Senate, Kraninger would hold significant sway over the way banks manage mortgages, credit cards, payday loans and other financial products they offer to customers. Without a deep understanding in the history and complexity of the topic, Democrats and consumer advocates say, she could become a puppet for influential financial groups.
Sen. Elizabeth Warren (D-Mass.) has planned a hold on Kraninger’s nomination, a procedural move that will slow Kraninger’s progress in the Senate. Warren says she wants answers about whether Kraninger played a role in the administration’s current “zero-tolerance” immigration policy that has separated families of undocumented immigrants. (The White House did not answer repeated questions about whether Kraninger was involved.)
She has Trump’s full support, White House spokeswoman Lindsay Walters said. Walters criticized the opposition to Kraninger’s nomination, calling it part of “the left’s obsession with politicizing the Bureau.”
“Mother Teresa could have been nominated, and Senator Warren still would have objected because the Bureau is about advancing her political ambitions rather than confirming a director who will effectively lead the Bureau,” Walters said.
Earlier this week, Kraninger met with Senate Majority Leader Mitch McConnell (R-Ky.), who said he will support her nomination.
“Ms. Kraninger’s resume and reputation suggest she’s well-suited to continue on the course Acting Director Mulvaney has charted toward transparency, accountability, and effectiveness within proper limits,” McConnell said in a statement.
Before running for her Senate seat, Warren helped create the CFPB and was former president Barack Obama’s first choice to lead it before her nomination was blocked by Senate Republicans.
While the partisan lines over Kraninger’s nomination have been drawn, little remains known about her views on the issues the CFPB grapples with.
Her nomination took much of Washington by surprise, as she rarely speaks publicly, and there is no record of her weighing in on questions of financial regulation. Her closest brush with the bureau appears to be her role in crafting Trump’s 2019 budget plan, which called for significantly cutting CFPB’s budget and putting restrictions on its enforcement powers. It “definitely reflects her reformist approach” to the CFPB, Walters said.
Banking officials and consumer advocates describe similar states of befuddlement as they scrambled to research the enigmatic nominee.
“I thought I was misspelling her name because when I Googled her I couldn’t believe she was who they picked,” said one senior banking official, who spoke on the condition of anonymity to speak candidly about the potential regulator. “I had never heard of her.”
Kraninger’s colleagues praise her ability to navigate governmental organizations and say her experience will serve her well as the CFPB.
Michael Chertoff, who worked with Kraninger as former president George W. Bush’s second Homeland Security secretary, praised the CFPB nominee. “Kathy is a smart, analytical public servant with broad government experience,” he said.
“I don’t know of anyone, personally, who better understands the budgeting, the Hill, the team building, the conflict resolution that are needed in any administration,” David Olive, a principal at homeland security public affairs firm Catalyst Partners, told The Washington Post.
Olive said he has known Kraninger since Sept. 11, 2001 and believed her “skill set” made her a strong candidate for the CFPB job.
“I don’t know of anyone who knows her who would put her as a rabid partisan, and there are certainly plenty of them in town,” he said. “She has been more on the substantive side than on the political agenda side.”
Critics see the lack of experience in financial regulations as disqualifying.
“I think that having a person in the position of director with no experience with consumer protection is a big mistake,” said Kathleen C. Engel, a research professor at Suffolk University Law School and a member of the Consumer Advisory Board fired by Mulvaney last month.
Developing consumer protection policies requires knowledge of behavioral economics and the history of the financial markets and regulations, she said. “Simply being a good bureaucrat will not cut it.”
Erica Werner contributed reporting.