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Consumer bureau director resigns after Biden's inauguration

Consumer bureau director resigns after Biden's inauguration
© Greg Nash

Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger resigned Wednesday at the request of the newly sworn-in President Biden, clearing the way for his nominee to lead the powerful regulatory agency.

Kraninger, a Republican appointed by former President TrumpDonald TrumpChinese apps could face subpoenas, bans under Biden executive order: report Kim says North Korea needs to be 'prepared' for 'confrontation' with US Ex-Colorado GOP chair accused of stealing more than 0K from pro-Trump PAC MORE, announced her departure via Twitter roughly an hour after Biden was inaugurated as the 46th U.S. president. 

“I support the Constitutional prerogative of the President to appoint senior officials within the government who support the President’s policy priorities, which ensures our government is responsive to the will of the people as expressed in presidential elections,” Kraninger wrote.

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Kraninger was confirmed to lead the CFPB in December 2018 for a term lasting until 2023. She was the second full-time director of the agency, which was created by the 2010 Dodd-Frank Wall Street reform law to oversee how banks, lenders, credit card companies and debt servicers treat their customers.

Biden would have been able to fire Kraninger had she not resigned thanks to the Supreme Court’s ruling in a challenge to the CFPB’s constitutionality backed by Kraninger and the Trump administration. The court found the CFPB’s structure unconstitutional in June and resolved the issue by striking down a provision limiting when the president can dismiss the bureau’s director.

Kraninger’s resignation gives Biden the opportunity to quickly appoint an acting director to lead the CFPB until his eventual nominee, Rohit ChopraRohit ChopraWarren presses Yellen to ramp up BlackRock oversight FTC eyes new approach to pharmaceutical mergers Senate panel advances Biden's picks to lead SEC, consumer bureau MORE, is confirmed. Chopra is currently a federal trade commissioner and Biden could appoint him to lead the CFPB on an acting basis until he is formally nominated. 

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Chopra is expected to take a much more aggressive stance toward the financial industry than Kraninger did, following in the footsteps of former Director Richard CordrayRichard Adams CordrayDennis Kucinich jumps into race to be Cleveland mayor Biden administration reverses Trump-era policy that hampered probes of student loan companies On The Money: IRS to start monthly payments of child tax credit July 15 | One-fourth of Americans took financial hits in 2020: Fed MORE (D) and Sen. Elizabeth WarrenElizabeth WarrenOvernight Health Care: Takeaways on the Supreme Court's Obamacare decision | COVID-19 cost 5.5 million years of American life | Biden administration investing billions in antiviral pills for COVID-19 Democratic senators press PhRMA over COVID-19 lobbying efforts  Schumer vows to only pass infrastructure package that is 'a strong, bold climate bill' MORE (D-Mass.), the CFPB’s architect.

During her roughly two-year stint at the bureau, Kraninger ramped up the CFPB's financial education efforts, sought to expand access to financial services by easing regulatory burdens on financial technology and issued new regulations on short-term high interest loans, debt collection and mortgage standards.

"Throughout my career, I have focused on implement common-sense solutions to complex problems and delivering real value for the American people," Kraninger wrote. She previously served as an official in the White House Office of Management and Budget, the Department of Homeland Security and several congressional committees.

"Over the past two years, that is exactly what I've done—with the law as my guide, with the support of the dedicated CFPB staff, and in partnership with many stakeholders who join in the Bureau's mission."

Republicans and industry advocates praised Kraninger for seeking a more moderate path for the CFPB, which had been previously run by fiercely ideological directors in Cordray and former acting chief Mick MulvaneyMick MulvaneyHeadhunters having hard time finding jobs for former Trump officials: report Trump holdovers are denying Social Security benefits to the hardest working Americans Mulvaney calls Trump's comments on Capitol riot 'manifestly false' MORE.

“We would like to thank Director Kraninger for answering the call to public service and, most importantly, her commitment to consumers. She advanced the Bureau’s financial education efforts, which was a hallmark of her tenure, and worked to provide steady, stable leadership," said Richard Hunt, president and CEO of the Consumer Bankers Association, a trade group for U.S. banks.

Democrats and financial sector critics, however, accused Kraninger throughout her tenure of not doing enough to hold the industry accountable for misdeeds and weakening rules meant to protect vulnerable consumers.

Updated at 2:29 p.m.