On her first full day leading the Consumer Financial Protection Bureau, Kathy Kraninger said she won’t be a puppet of Mick Mulvaney, the controversial acting director whom she replaced in the powerful regulatory position.
To underscore that point, the former White House aide said she would even reconsider a Mulvaney action that critics saw as a gratuitous jab at Democrats who championed the agency’s creation: changing its name to the Bureau of Consumer Financial Protection.
Kraninger’s declaration during a meeting with reporters Tuesday addressed one of the main criticisms of her selection. She is considered a protege of Mulvaney, her boss at the White House Office of Management and Budget who has executed a dramatic, industry-friendly shift at the watchdog agency.
“I am incredibly grateful to Mick Mulvaney. He was a fantastic boss for two years ... but I can tell you that I am here to be the director of this bureau, and I will be fully accountable for the decisions that I make going forward and they will be mine,” she said.
“I think the regulated industry, by and large, wants to comply” with consumer protection laws, Kraninger said. “But where there are bad actors we absolutely will take the enforcement actions to the full extent of the law and make sure we are protecting consumers.”
Still, during the 25-minute question-and-answer session, Kraninger did little to allay the other key concern of Democrats and consumer advocates — that she was unqualified for the job because she has no experience in finance, banking regulation or consumer protection.
And Kraninger indicated she would not fire a fair lending official who has acknowledged making controversial comments about racial discrimination in the past.
The only specific priority Kraninger outlined Tuesday for her oversight of an industry rife with potential problems was examining how the bureau secures all the consumer data it collects.
Kraninger said she was focused on getting up to speed at an agency with 1,500 employees and a broad mandate to protect consumers when they take out credit cards and mortgages and use other financial products.
“I told the staff I will be spending the next three months engaged in a listening tour, getting out to the field,” she said, noting many employees are in regional offices in San Francisco, Chicago and New York. Kraninger also said she planned to talk to state and federal regulators, consumer advocates and lenders.
Mulvaney, an outspoken critic of the bureau, took over as its acting director in November 2017 in a controversial appointment by President Trump. Mulvaney scaled back bureau enforcement efforts, moved to reassess tough new rules on payday loans and sought to rebrand the agency as the Bureau of Consumer Financial Protection.
He said that was the official name in the Dodd-Frank law, which created the agency in the aftermath of the financial crisis to prevent predatory lending and other abuses that led to it. But consumer advocates complained that the change was made to undermine the agency’s mandate by making it sound more bureaucratic while negating millions of dollars in advertising spent to make consumers aware of its existence after it opened its doors in 2011.
Kraninger had been the Office of Management and Budget’s associate director for general government since March 2017. She has about 20 years of federal government experience but mostly in homeland security and budget issues.
Kraninger was confirmed last week by the narrowest of margins — 50-49 — in a party line Senate vote in which only Republicans voted for her. She was sworn in by Vice President Mike Pence in a private ceremony Monday night.
On Tuesday, Kraninger offered a few olive branches to her critics.
She said she was reaching out to Rep. Maxine Waters (D-Los Angeles), a strong supporter of the bureau who is likely to become chairwoman of the House Financial Services Committee in January.
Kraninger also said she expected to speak with Richard Cordray, who was appointed by President Obama as the bureau’s first director and was sharply criticized by Mulvaney and other Republicans. Cordray resigned from the position a year ago to run for Ohio governor but lost the election.
And she even indicated she would reassess the bureau’s name change, acknowledging a reported internal analysis that found it would cost financial firms about $300 million to update databases, regulatory filings and disclosure forms.
“I am definitely going to be briefed on the name, and I can tell you that I care more about what the agency does than what it is called,” she said, flanked by a gold flag with the new seal declaring the agency “The Bureau of Consumer Financial Protection.”
The name change “is not fully completed yet,” she said. Although Kraninger said she understood Mulvaney’s decision, she realized there were costs and worries from the staff.
“I also understand that given the CFPB brand and the identity of the bureau, they were all caught off guard by that and many continued to be concerned about it and want to make sure again that consumers know the brand of this agency,” Kraninger said.
But she didn’t appear to budge on another major concern of Democratic lawmakers and consumer advocates about a bureau official.
Eric Blankenstein, whom Mulvaney put in charge of enforcing fair lending laws, has acknowledged writing blog posts in 2004 when he was 25 under a pen name questioning whether using the N-word made a person racist and claiming that a large majority of hate crimes were “hoaxes.”
“I have no intention of making any personnel decisions on my first day,” she said when asked about Blankenstein. She noted that such matters are “inherently confidential.”
Kraninger said she had read news reports about the matter and “certainly will take stock of everything going forward on that.” But then she indicated she was not inclined to take any action.
“I will take people at face value … in where they are today and what they’re doing for the bureau,” Kraninger said. She added that the bureau has “1,500 employees, so I am not going to go back and look at everything they may have ever written in their lives.”
Karl Frisch, executive director of consumer watchdog group Allied Progress, slammed Kraninger for her comments.
“On her first day of the job, Kathy Kraninger sent a signal to her new colleagues that reprehensible racism is not a fireable offense,” he said. “The CFPB’s work on fair lending and protecting consumers from discriminatory lending practices is irreparably tainted because of Eric Blankenstein. The fact that Kraninger doesn’t see that speaks volumes about her character.”