President Trump has picked a nominee for director of the Consumer Financial Protection Bureau and, true to form, he’s made a bad choice.
Trump this week will nominate Kathy Kraninger, a little-known White House budget official, to serve as the nation’s top consumer watchdog.
She has no experience in consumer advocacy, no experience as a regulator and no experience in financial services.
What Kraninger brings to the job, according to a White House statement, is “a fresh perspective” and “management experience.”
In fact, she doesn’t have much of that experience either. She has never held public office or run a government agency.
Ed Mierzwinski, senior director of the federal consumer program for the U.S. Public Interest Research Group, called Kraninger “completely unqualified” for the CFPB job.
Like other consumer advocates, he told me the suspicion is that Kraninger’s main role at the consumer agency will be to do the bidding of her current boss, White House budget chief Mick Mulvaney, who has served as interim CFPB director since November — and has been single-mindedly focused on weakening the agency.
“It is Mulvaney calling all the shots,” Mierzwinski said. “We see this as part of a make-Mulvaney-acting-director-for-life gimmick.”
That is a fresh perspective. Most consumers might have believed the main purpose of a CFPB director is to, you know, protect consumers.
Kraninger, a Georgetown University Law Center graduate, has worked in the White House Office of Management and Budget since March 2017.
Before that, she worked for the Senate Appropriations Subcommittee on Homeland Security. Before that, she worked as an aide to several Republican senators and bounced around other government posts.
“Ms. Kraninger does not appear to have any consumer protection experience that qualifies her to lead an important agency that oversees the largest banks and protects the public from risky mortgages, tricks and traps, and other abuses by Wall Street giants,” said Lauren Saunders, associate director of the National Consumer Law Center.
The banking industry, on the other hand, likes the cut of her jib.
Rob Nichols, president of the American Bankers Assn., said the group expects Kraninger to “build on” the foundation established by Mulvaney.
That’s another way of saying bankers don’t expect to be leashed any time soon.
Kraninger’s nomination comes out of nowhere. As recently as last week, a reported front-runner for the CFPB gig was Todd Zywicki, a law professor at George Mason University who has called the bureau “one of the most powerful and publicly unaccountable agencies in American history.”
Other names making the rounds for CFPB director included Rep. Darrell Issa, a wealthy California Republican who isn’t running for reelection and needs a job, and Rodney Hood, a former National Credit Union Administration board member who now works for banking giant JPMorgan Chase.
Trump has bypassed these potential nominees and chosen instead someone who would have to receive on-the-job training in consumer protection, financial regulation and running a government agency.
“Consumers need an effective and knowledgeable person who will fight for them and push for more rules to protect them,” said Rachel Weintraub, legislative director for the Consumer Federation of America. “What we need is someone who will respect the mission of the agency, which is to ensure a fair marketplace for consumers.”
She called it “profoundly concerning” that anyone lacking such qualifications would be named to the job.
On the other hand, Kraninger looks highly experienced at doing whatever Mulvaney tells her to do.
He recently sacked the bureau’s 25-member Consumer Advisory Board, which included consumer advocates, academics and industry execs. Their job was to provide informed input on the bureau’s policies.
I also reported the other day that Mulvaney is eager 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.”
California Atty. Gen. Xavier Becerra told me the database is in fact an important tool for rooting out unfair corporate practices. Without this resource, he said, such work would be “exponentially more difficult.”
Trump has shown himself to be a big fan of surrounding himself with inexperienced people who don’t like the agencies they run (see: Scott Pruitt, Environmental Protection Agency; Betsy DeVos, Education; Rick Perry, Energy; etc.).
“There’s quite a rogue’s gallery of people who don’t want their agencies to succeed,” Mierzwinski said.
He called Kraninger “a perfect candidate for a president who wants imperfect candidates.”
Mulvaney is expected to keep quarterbacking the CFPB no matter how things shake out. Under federal rules, he will be able to stay in place during his replacement’s confirmation process. A lengthy process would give him more time to directly tamper with the bureau.
His latest act of peeing in the pool was to change the sign outside the bureau’s Washington headquarters from CFPB to BCFP — that is, it’s no longer the Consumer Financial Protection Bureau, which most people have heard of, but is instead the Bureau of Consumer Financial Protection, which no one has heard of.
The only reason for the change, apparently, is sheer pettiness. Mulvaney suggested to reporters last week that he just wanted to give a poke in the eye to anyone who says he’s not following the law that created the agency. That law refers to it as a “bureau of consumer financial protection.”
“We changed the name because it’s the name in the statute,” he said. “If your whole theme is going to be to follow the statute, I thought it was a good, small way, but a very visible way, to send a message.”
Under the former director, Richard Cordray, the bureau could proudly boast that it had returned more than $12 billion in misbegotten cash to consumers.
Under Mulvaney, its signature achievement is sticking its tongue out at critics.
He also gets credit for requesting in January all of $0 to keep the CFPB running over the following three months, saying he’d make do with whatever funds were on hand.
Is it any wonder banks love this guy? You couldn’t ask for a more yeah-whatever-do-as-you-please sort of regulator.
That’s the foundation that bankers expect Kraninger to build on.