Finance

Mulvaney aims to cement CFPB legacy by ensuring successor’s confirmation

Greg Nash

Consumer Financial Protection Bureau (CFPB) acting Director Mick Mulvaney is going to bat for his potential successor, and in doing so he’s poised to extend his influence at the watchdog agency.

Mulvaney, who doubles as head of the White House Office of Management and Budget (OMB), has emerged as a key proponent of Kathy Kraninger, President Trump’s pick to be the CFPB’s full-time director, despite his previous reluctance to influence the selection process.

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Trump’s decision to nominate Kraninger, an associate director at the OMB, surprised lawmakers and industry advocates who were expecting the president to go with a bigger-name nominee.

As a result, Mulvaney has sought to quell concerns about Kraninger’s credentials to lead the 7-year-old agency. He’s called key Republican senators this week to tout Kraninger’s experience, and he issued a glowing statement in support of her Senate confirmation.

Congressional Republicans have praised Mulvaney’s efforts to rein in the CFPB’s regulatory actions and are expected to support Kraninger, who they see as building on Mulvaney’s legacy. That, in turn, has raised concerns among Democratic lawmakers and other White House critics who say her nomination is an attempt to extend Mulvaney’s influence over the CFPB.

Liberals are broadly opposed to Kraninger’s nomination, but the question of how much she’d follow in Mulvaney’s footsteps is the primary concern among moderate Democrats who’ve crossed party lines to support other Trump nominees.

“I don’t think Mulvaney can do both jobs, so hopefully this person isn’t just a figurehead,” Sen. Jon Tester (D-Mont.) told The Hill on Tuesday. “If it’s just a figurehead, I’ve got some major concerns.”

If confirmed, Kraninger would wield substantial power and independence to police the financial services industry over a five-year term. The bureau’s funding mechanism is separate from the annual appropriations process that applies to most federal agencies, giving the director unique control over the agency’s budget.

It’s still unclear whether the president can legally fire the bureau’s chief without cause, meaning Kraninger could lead the CFPB well into the next president’s tenure, even if there are significant policy disagreements between the two.

Mulvaney has drawn scorn from Democrats for easing the CFPB’s oversight of the financial services industry, particularly the delaying of rules issued by former Director Richard Cordray and his efforts to reduce the independent agency’s budget and staff.

Kraninger has more than a decade of experience with budgets for federal agencies, including those within the Treasury, Homeland Security, Housing and Urban Development and Homeland Security departments. Her role at OMB covers seven Cabinet departments and 30 agencies, including all federal financial regulators, according to the White House.

She’s been endorsed by Senate Majority Leader Mitch McConnell (R-Ky.) and House Financial Services Committee Chairman Jeb Hensarling (R-Texas), who both say she’s well equipped to reform what they consider an unruly and unaccountable regulator.

But Kraninger, a former Senate Appropriations Committee staffer and Department of Homeland Security official, has little hands-on experience with crafting or enforcing financial rules. Her views on the CFPB’s operations and policies are also largely unknown, spurring questions about her qualifications for the job.

“I don’t know much about her, but I’m concerned if she was Mick Mulvaney’s choice,” said Sen. Mark Warner (D-Va.), a supporter of the Dodd-Frank rollback legislation that Trump signed into law last month.

Mulvaney has been one of Kraninger’s biggest advocates, playing an unexpectedly prominent role in selling Republican senators on her nomination.

The acting chief has said for months that he doesn’t want to cast a shadow over the confirmation process of his successor.

“I’ve tried really hard to stay out of the discussion for whoever the White House nominates,” Mulvaney said at a banking industry conference in April. He added that his influence “runs the risk of the hearing being as much about me as about” the nominee.

Mulvaney also told reporters as recently as last week that he had avoided internal conversations about who Trump would pick.

But Mulvaney has shifted gears since Kraninger’s nomination, which was made official Monday. The following day he called her “the ultimate public servant” and praised her “vigorous independence, sharp-as-a-tack intelligence, and simple, old-fashioned, Midwestern humility.”

“I know that my efforts to rein in the bureaucracy at the Bureau of Consumer Financial Protection to make it more accountable, effective, and efficient will be continued under her able stewardship,” Mulvaney said.

Several GOP members of the Senate Banking Committee, which is expected to hold a confirmation hearing for Kraninger later this year, said Mulvaney has reached out to them to discuss Kraninger’s nomination.

Sen. Mike Rounds (R-S.D.) said Mulvaney spoke “very highly” of his potential successor.

Fellow GOP Sens. Jerry Moran (Kan.), David Perdue (Ga.) and John Kennedy (La.) — all members of the Banking Committee — told The Hill that Mulvaney called them to talk about Kraninger’s nomination.

“Mulvaney is very high on the nomination, and that carries a lot weight with me,” Kennedy said.

Under federal law, Mulvaney is allowed to remain as acting head of the CFPB for as long as it takes to confirm his successor, giving him more time to transform the agency.

Kraninger will likely face a lengthy confirmation process as Congress rushes to finish a slew of must-pass bills before the November midterm elections. Sen. Elizabeth Warren (D-Mass.), who’s considered the CFPB’s architect, said she would place a hold on Kraninger’s nomination, further slowing down the process.

Senate Republicans have a slim majority and cannot afford a single defection to confirm Kraninger while Sen. John McCain (R-Ariz.) receives treatment for a brain tumor at home in Arizona, assuming both sides dig in on their opposition or support.

But Kraninger could earn the backing of some moderate Democrats who are facing reelection this year in states that Trump won in 2016.

Sens. Heidi Heitkamp (N.D.) and Joe Donnelly (Ind.) — two of the most vulnerable Senate Democrats — told The Hill on Tuesday that they had just started to review Kraninger’s nomination and had not come to a decision yet.

Tags Donald Trump Elizabeth Warren Heidi Heitkamp Jeb Hensarling Jerry Moran Joe Donnelly John Kennedy John McCain Jon Tester Mark Warner Mick Mulvaney Mike Rounds Mitch McConnell Richard Cordray
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