Critics say CFPB nominee Kathy Kraninger lacks the experience to be the nation’s top consumer financial watchdog

Kathy Kraninger, left, is President Trump's nominee to be director of the Consumer Financial Protection Bureau. She's shown here at a 2008 event when serving as deputy assistant secretary for policy at the Department of Homeland Security.
(Gerald Herbert / Associated Press)

Nominees for top federal financial regulators usually have worked in high-level government or private-sector jobs, and President Trump had been following that traditional playbook. Until his latest pick.

His choice for comptroller of the currency was chief executive of Pasadena’s OneWest Bank; the selection for Federal Deposit Insurance Corp. chairwoman had been executive vice president of Fifth Third Bank and chief counsel for the Senate Banking Committee; and the nominee to head the Federal Reserve had served on the central bank’s board since 2012 after having been a top Treasury official and a partner at a high-powered asset-management firm.

But now for director of the Consumer Financial Protection Bureau — arguably the single-most-powerful financial regulator in Washington — Trump has tapped a little-known White House aide with no apparent relevant experience in finance, banking regulation or consumer protection.


The announcement this weekend that Kathy Kraninger, associate director for general government at the Office of Management and Budget, would be Trump’s nominee to head the consumer bureau came as a surprise.

And the more people have examined her resume, the greater the surprise. Kraninger’s background largely has been in budget and homeland security in Congress and the executive branch.

The nomination has “led nearly every lobbying and research office in Washington to search frantically for information on Kraninger’s background, which despite her good credentials as a budget and national security expert is pretty sparse,” said a report Monday from strategic research firm Capital Alpha Partners.

Consumer advocates were not impressed.

“Kraninger … has neither experience as a regulator nor expertise in consumer financial issues,” said Bartlett Naylor, a financial policy advocate at Public Citizen, a consumer advocacy group. “The nation’s leading consumer financial regulator is not an entry-level job.”

House Minority Leader Nancy Pelosi (D-San Francisco) and others in her party have questioned Kraninger’s qualifications. There also has been some criticism from the right.

“She has no record on the issues and no experience with this policy area,” said J.W. Verret, an assistant professor at George Mason University’s Antonin Scalia Law School and an expert on financial regulation.


“I’m shocked that at the last minute they pulled out this unqualified candidate,” said Verret, who is organizing opposition to the nomination by circulating a letter opposing it to conservative and consumer credit legal scholars.

Kraninger’s lack of experience probably will make her confirmation difficult in the narrowly divided Senate.

But the White House has defended the pick.

Kraninger “will bring a fresh perspective and much-needed management experience” to the consumer bureau, said White House Deputy Press Secretary Lindsay Walters.

But the nomination seems designed to ensure that Mick Mulvaney, who has been serving as the bureau’s acting director since November, can stay on the job, Jaret Seiberg, an analyst with brokerage and investment bank Cowen & Co., wrote in a research note Monday.

Under a time limit in the law by which he was appointed in November, Mulvaney would have been required to leave the consumer bureau job Friday if the White House hadn’t nominated someone to be the permanent director.

Kraninger’s nomination triggers a provision in the Federal Vacancies Reform Act that allows Mulvaney, who also is OMB director, to serve until the Senate confirms or rejects the pick. That process could take months.

“We see the nomination of Kathy Kraninger as a way to keep OMB Director Mick Mulvaney in charge of the Consumer Financial Protection Bureau for years to come without the need to ever get someone confirmed,” Seiberg wrote.

Mulvaney has been praised by Republicans for significantly scaling back the activities of the consumer bureau, which was created in the aftermath of the financial crisis to try to prevent a repeat by cracking down on predatory lending and other abuses.

Seiberg noted that Kraninger had the advantage of being able to remain in her White House job while the Senate considers the nomination, posing less risk to her if she ultimately is rejected.

A private-sector nominee, such as a financial industry executive, normally would have to step down once nominated because of potential conflicts of interest with work related to the consumer bureau’s industry oversight.

Since joining the Office of Management and Budget in March 2017, Kraninger has overseen $250 billion in funding for seven cabinet departments and 30 agencies, including the Department of Homeland Security, the White House said.

Before that, she worked as the clerk for the Senate Appropriations subcommittee on Homeland Security and served as deputy assistant secretary for policy at the Department of Homeland Security, according to her LinkedIn page and a speaker bio for a 2017 Homeland Security conference.

Financial industry groups congratulated Kraninger on her nomination. And Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee and an outspoken critic of the bureau, said Monday he supported the nomination.

“I am especially pleased that President Trump nominated an individual with management and budget experience — two qualities that are desperately needed at an agency which has been plagued with cost overruns and unnecessary spending and does not have a full-time and an independent inspector general,” Hensarling said.

The bureau, which gets its funding from the Federal Reserve, is overseen by the central bank’s inspector general.

Russ Vought, OMB’s deputy director, said Kraninger was “a fantastic choice” who would be missed at the White House.

“Her work ethic and ability to get things done are comparable to none, and her subject matter expertise on a diverse range of issues, from financial services to homeland security and regulatory reform, will be extremely hard to replace,” he said.

Senate Banking Committee Chairman Mike Crapo (R-Idaho) declined to comment on the nomination Monday. Verret said he spoke to some aides for Republicans on the committee and they expressed “immediate and strong skepticism” about the nomination.

Verret compared the choice of Kraninger to the nomination of Harriet Miers in 2005 to the Supreme Court. Miers was White House counsel to President George W. Bush, but she withdrew after her selection drew strong opposition from conservatives, partly because of questions about her qualifications for the job.

Kraninger’s “experience is all in Homeland Security and budget. Those issues have zero application to the issues she’ll be dealing with as CFPB director,” Verret said. “This is certainly Harriet Miers 2.0.”

Twitter: @JimPuzzanghera