Trump surprises with consumer agency pick

Washington is scrambling to learn more about the little-known budget director that President Trump chose to lead the controversial Consumer Financial Protection Bureau (CFPB).

Kathy Kraninger, an associate director at the White House Office of Management and Budget (OMB), would wield enormous power to regulate and police financial markets as CFPB director.

The White House has praised Kraninger as a steady hand with ample government experience to “clean up” the agency, which has long been a target of President Trump and congressional Republicans.

{mosads}Kraninger, a former Department of Homeland Security official and Senate Appropriations Committee aide, has spent more than a decade in the federal government.

Her supporters point to her work at the OMB reviewing the budgets and policies of federal financial regulators as critical background for the new post.

Even so, the CFPB directorship would be Kraninger’s highest-profile post to date. That and her limited experience in financial regulation and close ties to OMB Director Mick Mulvaney, the bureau’s acting chief, are raising questions about how she’d wield the extensive powers given to the bureau’s leader.

“The Administration needs someone lower level who does not have such a large reputation and can win Senate approval,” said a financial services industry advocate on K Street, explaining the pick. “Someone who will not burn the house down.”

Trump’s decision to nominate Kraninger, initially revealed Saturday, surprised lawmakers and advocates closely following the bureau’s future.

The president passed over several higher-profile picks to lead the agency earlier this year, including National Credit Union Administration Chairman Mark McWatters and George Mason University law professor Todd Zywicki.

The CFPB has been without a permanent leader since November 2017, when former Director Richard Cordray resigned to run for governor of Ohio. Cordray had served as the CFPB’s first full-time director, appointed by President Obama to lead the financial watchdog agency designed by Sen. Elizabeth Warren (D-Mass.).

The financial services industry and its GOP allies have blasted the CFPB and its former leadership since the bureau’s inception. Critics insist the bureau has too much power to penalize a broad swath of companies and a dangerous level of independence from Congress.

Cordray’s departure allowed Trump to install Mulvaney, already his OMB director, as the bureau’s acting chief. Mulvaney has spent his tenure shaking up the bureau, making it more receptive to the views of banks and the companies it regulates and scaling back its reach.

If confirmed, Kraninger would be taking control of an agency that has been the center of a deep political fight over its mission and powers.

Some have questioned if she would be ready to take the reins effectively.

The White House, though, is touting Kraninger’s experience in federal agencies for more than a decade.

In a Saturday statement, White House deputy press secretary Lindsay Walters said Kraninger “will bring a fresh perspective and much-needed management experience to the [bureau], which has been plagued by excessive spending, dysfunctional operations, and politicized agendas.”

The White House said at the OMB Kraninger oversees $250 billion in federal spending for seven Cabinet departments and 30 agencies.

Kraninger’s ties to Mulvaney could pose the most significant obstacle to her confirmation. While the White House has highlighted Kraninger’s work at the OMB, liberal politicians and groups have seized on her connections to Mulvaney.

Mulvaney has taken drastic steps to curb the CFPB’s impact on financial markets by delaying Cordray-era rules, changing internal policies and cutting the bureau’s funding. Kraninger’s critics fear that she will follow suit and have dismissed her as a Mulvaney crony without the necessary knowledge of financial rules to lead the CFPB.

House Minority Leader Nancy Pelosi (D-Calif.) said that Kraninger’s “apparent lack of experience in consumer finance, coupled with the Administration’s hostility to consumer protection, raises questions about her qualifications to lead such an important agency.”

Sen. Sherrod Brown (Ohio), ranking Democrat on the Senate Banking Committee, criticized Kraninger’s qualifications and called on Trump to appoint “an experienced, serious, independent leader.”

That could hint at a contentious Senate confirmation hearing for Kraninger, though Kraninger appears to be safe with Republicans.

Her allies said she has ample experience to lead the CFPB and have brushed off concerns about her financial knowledge.

One person who worked with her in the George W. Bush administration described her as someone who has a grasp on negotiating and “how the regulatory apparatus really works to get things done.”

“There’s nothing unique about the financial services industry that someone who’s succeeded in other industries can’t navigate,” he said. “It hasn’t been her whole career, but it has been a part of her most recent and most important job.”

CFPB communications director John Czwartacki raised the issue of sexism. On Twitter, he shared a response to questions about her qualifications, calling it a “powerful observation about the role sexism is playing in the opposition to Kathy Kraninger.”

“In 2018, this is so sad,” Czwartacki tweeted.

Financial services industry advocates, though, seemed open to Kraninger. The industry is eager for Trump to tame the CFPB, and some said Kraninger could be a safe choice to manage the polarizing agency.

Top bank trade groups praised Kraninger’s experience while acknowledging there were questions about her views on financial regulation.

“We trust she shares our interest in ensuring consumers have access to the financial products they want and need, while maintaining the protections they deserve,” said Rob Nichols, president and CEO of the American Bankers Association.

Richard Hunt, president and CEO of the Consumer Bankers Association, expressed hope Kraninger would help the consumer agency avoid wild political swings with each director.

Hunt called Kraninger a “clean-up-the-mess pick.”

Megan R. Wilson contributed.