Kraninger CFPB Nominee Faces Hurdles About Knowledge, Past Jobs

By Evan Weinberger

Kathy Kraninger, President Donald Trump’s nominee to lead the Consumer Financial Protection Bureau, enters her July 19 confirmation hearing as a blank slate when it comes to policy questions and likely has the votes needed to win confirmation, but issues outside of consumer finance could stall her progress.

A slim Republican majority in the Senate means Kraninger will have to provide good answers to questions about her lack of experience regulating consumer financial services and her role in shaping unrelated Trump administration policies, including separating children from parents at the U.S. border. Republicans hold a 51-49 majority, with Sen. John McCain (R-Ariz.) on the sidelines due to an aggressive form of brain cancer.

If Kraninger is unable to sufficiently answer questions from the Senate Banking Committee, her nomination could run aground, Alan Kaplinsky, the co-leader of Ballard Spahr LLP’s Consumer Financial Services Group, told Bloomberg Law.

“The margin for error is not very large here,” he said in a July 16 phone interview.

Financial Policy Chops

Trump nominated Kraninger, a program associate director at the Office of Management and Budget, to serve as the CFPB’s director June 19. Kraninger’s role at the OMB is to oversee budgets for several agencies, including the departments of Homeland Security, Treasury, Housing and Urban Development, and Justice.

Mick Mulvaney, the CFPB’s acting director, also leads the OMB. That has led to concerns about how independent Kraninger would be from the White House.

Financial regulation advocacy group Better Markets warned in a June 25 statement that, if confirmed, Kraninger could take “her cues from her old boss.”

She also was a deputy assistant secretary at the Homeland Security Department and was an aide to both the House and Senate appropriations committees.

“In general, we’re excited about the experience to work with Director Mulvaney in his acting capacity but also Kathy Kraninger,” Jamie Fulmer, the executive vice president for public affairs at Advance America, one of the country’s largest payday lenders, told Bloomberg Law in a July 10 interview.

The lack of specific experience in finance that some worry about may also lead to better policy decisions for industry groups, Dennis Shaul, the president and chief executive of the Community Financial Services Association of America, said July 10.

“There may be virtue in her background, in the sense that, reading between the lines, it looks like she would be an administrator and would rely very heavily on her staff,” Shaul told Bloomberg Law.

Even though the CFPB is still largely staffed by people who worked for former Director Richard Cordray, consumer advocates see danger in Kraninger’s likely reliance on staff since Mulvaney put in place several high-level employees at the bureau.

“The CFPB deserves a leader with a background in consumer protection and knowledge of major issues facing the consumer financial markets,” Christine Hines, the legislative director at the National Association of Consumer Advocates, told Bloomberg Law in a July 16 phone interview.

Separation Issues

Beyond questions about her experience in consumer financial protection issues, Kraninger is likely to face questions about her role in developing the Trump administration’s zero-tolerance immigration policies that saw approximately 3,000 children, including infants and toddlers, separated from their parents.

That policy has officially ended, but the administration has since had trouble reuniting many of the children with their families.

Sens. Elizabeth Warren (D-Mass.) and Sherrod Brown (D-Ohio) have raised their concerns about Kraninger’s role in overseeing the budgetary aspects of the program given her work with the Homeland Security and Justice departments. Warren has said she would put a “hold” on the nomination.

Banking Committee Democrats on July 17 asked its chairman, Sen. Mike Crapo (D-Idaho), to postpone the hearing until Kraninger and the White House answered a series of questions about her role in developing the policy. Crapo denied that request.

“Even though that issue is really not related to her qualifications to serve as director, I would guess it would be politically toxic if she had any role in developing that policy,” Kaplinsky said.

Warren went farther, releasing a July 18report highlighting Kraninger’s oversight role in not just the zero-tolerance immigration policy, but the administration’s response to Hurricane Maria’s devastation of Puerto Rico and the U.S. Virgin Islands as well as HUD’s budgets. The report said that

The report found that “a close look at [Kraninger’s] record shows consistent mismanagement, often with devastating results for poor and vulnerable people. Her record does not justify a massive promotion to lead the federal agency charged with protecting consumers.”

The White House didn’t respond to a request for comment.

Time Running Out

Kraninger’s nomination may face yet one more challenge: floor time.

Even if the Senate skips its August recess, a fight is brewing over Judge Brett Kavanaugh’s nomination to the U.S. Supreme Court. After that, midterm elections loom.

Mulvaney can stay at the CFPB until the end of the year and, as Republicans are pleased with his leadership, there may not be much of an incentive to move on Kraninger’s nomination any time soon.

“I really question how much the senators are going to stick their necks out on an issue before an election when they’re already very content with Mick Mulvaney running the agency,” Kaplinsky said.

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To contact the editor responsible for this story: Michael Ferullo at

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