Now that White House aide Kathy Kraninger has received the blessing of the Senate Banking Committee’s Republican majority to become the nation’s top consumer financial watchdog, it’s worth highlighting who’s in her corner and who isn’t.
Kraninger is supported, of course, by President Trump, who nominated her for the job. She’s also backed by her boss, White House budget chief Mick Mulvaney, who currently serves as the CFPB’s acting director.
“I have never worked with a more qualified individual than Kathy,” Mulvaney said in a statement. He cited her “sharp-as-a-tack intelligence and simple, old-fashioned, Midwestern humility.”
Opposing Kraninger is, well, pretty much everyone who takes consumer protection seriously.
“Ms. Kraninger doesn’t have one iota of the necessary experience, and it’s unclear whether she even has the will to carry out this job,” said Christine Hines, legislative director of the National Assn. of Consumer Advocates.
It’s a sentiment shared by every Democrat on the Banking Committee, which approved Kraninger on Thursday by the narrowest of party-line margins, 13-12.
It’s also a sentiment I heard again and again in conversations with consumer advocates, former CFPB officials and legal scholars.
“Ms. Kraninger has no qualifications for this job,” said Judith Fox, a professor of consumer law at Notre Dame Law School. “She has no experience in consumer finance, consumer protection or any of the relevant subject matters involved.”
Indeed, for all her Midwestern humility, Kraninger, 43, has never worked in consumer affairs, never worked in financial services, never worked as a financial regulator, never held public office and never run a government agency.
Kraninger graduated from Milwaukee’s Marquette University in 1997 and from Georgetown University Law Center in 2007. She’s done stints at the Transportation and Homeland Security departments, and as a congressional staffer.
Rob Nichols, president of the American Bankers Assn., welcomed Thursday’s vote, citing Kraninger’s “substantial government and management experience.”
At the Office of Management and Budget, which she joined last year, Kraninger oversees funding for Homeland Security and reportedly played a role in administering Trump’s “zero tolerance” policy of separating immigrant families.
On Wednesday, dozens of consumer, civil rights and labor groups submitted a letter to the Banking Committee arguing that Kraninger is unfit to lead the CFPB.
“Either Ms. Kraninger failed terribly at her job, putting the well-being and lives of thousands of children in danger, or, even more concerning, she purposefully sought to run an ineffective, cruel process in order to punish children and/or their parents, in which case she lacks the moral sense or standing to hold a government position,” the groups wrote.
In his statement, Mulvaney said Kraninger’s background in homeland security gives her “the kind of experience Washington so desperately needs.”
I put that to Patricia McCoy, a law professor at Boston College who served previously as the CFPB’s assistant director for mortgage markets. Is Kraninger’s homeland security experience a plus?
“No,” McCoy answered without hesitation. “Her only qualification is having been Mulvaney’s right-hand person and her willingness to carry out his vision.”
McCoy told me that Mulvaney has installed his lieutenants throughout the agency, and their sole purpose has been to hamstring efforts to investigate and, if warranted, punish companies that take advantage of consumers.
“I would have felt very compromised if I’d have had to work like that,” she said, adding that before she exited the agency in 2011, everyone from rank-and-file staffers to senior managers were committed to safeguarding consumers.
Ed Mierzwinski, senior director of the federal consumer program for the U.S. Public Interest Research Group, said Kraninger in no way reflects such zeal.
“She has not indicated any desire to achieve the agency's mission — protecting consumers from the myriad financial harms and threats that lurk in that marketplace,” he said.
“She has indicated only that she supports and expects to continue everything Mulvaney has done, which has been to starve the agency of funding and mission leadership, and to interpret its job as narrowly and in as pro-industry a way as possible.”
Mulvaney recently sacked the bureau’s 25-member Consumer Advisory Board, which included consumer advocates, academics and industry executives. Their job was to provide informed input on the bureau’s policies.
He’s also keen to shut down the CFPB’s database of consumer complaints about financial firms, which he has called “a Yelp for financial services sponsored by the federal government.”
In January, Mulvaney asked Congress for all of $0 in funding to keep the CFPB running, saying he’d make do with whatever funds were on hand.
The only question now is whether Senate Majority Leader Mitch McConnell will bring up Kraninger for a vote by the full Senate before the midterm elections in November, or whether he keeps her on hold until next year, allowing Mulvaney to stay put possibly until March.
Either way, the writing’s on the wall. Trump wants the CFPB dead, and he’s found people he can trust to do the dirty work.
“Over the past year, Mulvaney has taken a wrecking ball to the CFPB and has appeared more intent on serving the interests of the financial industry than looking out for what’s best for consumers,” said Pamela Banks, senior policy counsel at Consumers Union.
“His tenure at the CFPB has provided a stark lesson in how the bureau's ability to take on financial fraud and abuse can be seriously undermined when it is led by a director who isn’t committed to carrying out its mission,” she said.