Trump Family Border Policy Could Trip Up CFPB Nominee

By Evan Weinberger

President Donald Trump’s nominee to lead the Consumer Financial Protection Bureau has become ensnared in the controversy over the administration’s border family separation policy.

Sen. Elizabeth Warren (D-Mass.) on June 19 put a hold on the CFPB nomination until she gets answers about what role Kathy Kraninger played at the Office of Management and Budget in developing the zero-tolerance policy, and its resulting separation of children of asylum seekers from their parents at the U.S.-Mexico border.

Kraninger, a program associate director at the OMB, oversees the budgets of seven executive agencies, including the Justice Department and the Department of Homeland Security.

“I will put a hold on her nomination — & fight it at every step — until she turns over all documents about her role in this,” Warren said in a tweet.

Zero-Tolerance Questions

Warren’s tweet came as she and Sen. Sherrod Brown (D-Ohio), the ranking member on the Senate Banking Committee, sent a letter to Kraninger seeking further information about what help she provided in developing the zero-tolerance policy.

Kraninger has provided assistance since 2017 in developing budgets for the Justice and Homeland Security departments, as well as “ongoing policy and management guidance” for them, the senators’ letter noted.

“In that role, you may have been involved in providing ‘policy and management guidance’ on the Zero-Tolerance Policy, helped implement the Zero-Tolerance Policy, and worked with DHS on budgetary and funding issues as it adjusted to the Zero-Tolerance Policy,” the letter from Brown and Warren said.

Attorney General Jeff Sessions announced the policy April 6, instructing U.S. attorneys to prosecute criminally all cases of attempted illegal entry into the U.S., including all cases referred by DHS.

Those criminal prosecutions have resulted in about 2,000 children being separated from their parents.

Both Brown and Warren want Kraninger, a veteran of the Department of Homeland Security, to provide “a complete description” about her role in developing and implementing the policy, as well as all electronic communications she had with officials in the White House, Justice Department, and DHS about it.

Neither the OMB, where Kraninger still works, nor the CFPB could be reached for comment.

Placeholder Nomination

Trump nominated Kraninger to be the permanent CFPB director June 18.

If confirmed, Kraninger would take over for acting CFPB Director Mick Mulvaney, who also serves as Kraninger’s boss in his job as OMB director.

The nomination was met with concerns that Kraninger, an expert in budget and security issues, has no experience in consumer finance.

“I would like somebody to have some consumer finance background, and it doesn’t appear that she has that kind of a background,” Alan Kaplinsky, the co-head of Ballard Spahr LLP’s consumer finance group, told Bloomberg Law in a June 19 phone interview. “She may be very good at figuring how to trim the CFPB’s budget, but there’s a lot more to running the CFPB than that.”

Kraninger’s lack of experience on consumer finance issues means that her potential work on the zero-tolerance policy could provide a window into her views on a range of issues, Lisa Gilbert, the vice president of legislative affairs at consumer group Public Citizen, told Bloomberg Law in a June 19 phone interview.

“The things that we could find out about her DHS experience could be quite troubling,” she said.

The complicated confirmation process is likely to get even muddier with questions about the border policy in addition to those about Kraninger’s views on consumer financial regulations, Kaplinsky said.

It’s unclear whether Kraninger will get a hearing before the Senate Banking Committee. The nomination came just before Mulvaney’s term as acting CFPB director was scheduled to end.

That time has been extended now that Mulvaney’s successor has been nominated.

“She sounds like a placeholder,” Kaplinsky said. “It’s just somebody that they could nominate that would enable Mulvaney to remain there.”

And that has Gilbert and other supporters of the CFPB’s consumer protection efforts worried. Even if Kraninger is confirmed, Gilbert says she fears the current acting director will maintain a lot of sway over his replacement.

“I think they win either way. If she is put into office, he will still have lots of oversight,” Gilbert said.

To contact the reporter on this story: Evan Weinberger in New York at eweinberger@bloomberglaw.com

To contact the editor responsible for this story: Michael Ferullo at mferullo@bloomberglaw.com

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