Bloomberg reports this week how the bureau might change with a Democrat president and split Congress, pending the results of the Jan. 5 runoff election in Georgia.
12/9/2020 10:30
After Inauguration Day, President-elect Joe Biden will have the authority (as a result of the U.S. Supreme Court decision in Seila Law v. Consumer Financial Protection Bureau) to remove Consumer Financial Protection Bureau Director Kathy Kraninger at will before the end of her term.
When he will do that and who he will select as Kraninger’s replacement—and if Congress will approve that person—all remain to be seen.
But Bloomberg reports it’s likely to happen in the weeks after Biden takes office, in which case the enforcement approach at the bureau could change.
“Banks should be prepared for more aggressive enforcement and an expansion of the CFPB’s authority through its rulemakings,” Rachel Rodman, a former CFPB lawyer who now represents banks as a partner at Cadwalader, Wickersham & Taft LLP in Washington, told Bloomberg. She expects the agency to be “more likely to bring an enforcement action, pursue novel legal theories and more likely to demand higher penalties,” according to the article.
Potential replacements for Kraninger, Bloomberg reports, include Federal Trade Commission member Rohit Chopra and U.S. Rep. Katie Porter, D-Calif.
Or Chopra, who previously worked as assistant director in student lending at the bureau, could serve on an acting basis under the Federal Vacancies Reform Act.
Patrice Ficklin, fair lending director at the CFPB, is also reportedly on Biden’s short list, according to Bloomberg.
Partisanship in Congress will likely make confirming a Biden-appointed director a challenge, according to the article, especially if Republicans remain the majority in the U.S. Senate after the Jan. 5 runoff election in Georgia.
ACA International reported on the CFPB director appointment in 2021 here and you can read more insights from Brian Johnson, a partner at Alston & Bird in Washington, D.C., on case law and academic research surrounding the implications of a president removing a department head confirmed by the U.S. Senate before the end of their term here.