Senate Banking Committee Approves Nomination of Kathy Kraninger to Head BCFP

Republican majority on committee secures Kraninger’s nomination in a 13-12 vote. The nomination advances to the Senate floor for approval.

8/23/2018 11:00 AM

Senate Banking Committee Approves Nomination of Kathy Kraninger to Head BCFP

After a contentious discussion Thursday, the Senate Banking Committee voted 13-12 along party lines to approve the nomination of Kathy Kraninger, President Donald Trump’s candidate to lead the Bureau of Consumer Financial Protection for a five-year term. If confirmed by the Senate, Kraninger will replace acting director Mick Mulvaney, who doubles as director of the Office of Management and Budget.

The timing of the full Senate vote is uncertain due to the midterm elections and the dwindling calendar. In fact, Ed Groshans, a strategist specializing in banks and finance, and senior vice president for financial services with Height Analytics, told MarketWatch that, “it’s not clear the full Senate will vote on her nomination during this Congress, which would require President Trump to renominate her next year. At this point, we expect Mulvaney will remain at the agency until at least March 2019,” he said.

CNN previously reported that Kraninger will face a tough Senate battle in her journey to the top position as she is expected to follow Acting Director Mick Mulvaney’s lead in implementing common-sense reforms and programs that have been viewed unfavorably by consumer groups and others on Capitol Hill.

Nevertheless, Thursday’s executive session moved forward with U.S. Sen. Mike Crapo, R-Idaho, chairman of the committee, stating, “The CFPB was the most polarizing part of Dodd-Frank and it is no surprise that the confirmation votes of Richard Cordray and now Kathy Kraninger are contentious. As I said at her (July 19) nomination hearing in response to questions about members’ documents requests, I would not expect this administration, or any administration, to provide documents during an ongoing deliberative process.”

Kraninger, currently an associate director at the OMB who works for Mulvaney, has drawn opposition from U.S. Sens. Elizabeth Warren, D-Mass., Catherine Cortez Masto, D-Nev., Robert Menendez, D-N.J., Sherrod Brown, D-Ohio, ranking member of the committee, and Jack Reed, D-R.I., for her supposed lack of management experience and her role developing policies on immigration and emergency response as part of Trump’s administration. Before Thursday’s vote and the brief August Senate recess, several members attempted to stall the confirmation process by placing a hold on the hearing citing the administration’s failure to respond to requests for “relevant documents and other information,” related to issues outside of the BCFP’s mission.

“The people on this committee should do our jobs, we should reject this nomination,” Warren, one of the most vocal opponents of Kraninger, said in her remarks during the hearing.

Brown, also in opposition, stressed that Kraninger has not been forthcoming in response to the Democrat members’ requests for more information and documents during the nomination process.

“What she hasn’t told us is she will be an independent consumer advocate, which is what we are looking for,” Brown said. “This is about whose side you are on. We created the consumer protection bureau to fight for average Americans and stand up for the people who we serve.”

Support for Kraninger’s nomination focused on reform of the BCFP under her leadership and accountability of transparency of the agency.

“Dodd-Frank is an overcorrection to the 2008 financial crisis. This is evidenced by the strong bipartisan support from both sides of the aisle for the Economic Growth, Regulatory Relief and Consumer Protection Act, which rolled back some of Dodd-Frank’s regulatory impositions. One of the most unfortunate legacies of Dodd-Frank, in my opinion was the creation of the Bureau of Consumer Financial Protection … established under the previous administration,” said U.S. Sen. Mike Rounds, R-S.D. “The BCFP has morphed into an unaccountable regulatory agency run by unelected bureaucrats who have very little oversight from Congress. If we can’t get rid of the BCFP, my preference would be to change the [bureau] so it is led by an appointed commission … That being said, I am proud to be supporting Ms. Kraninger’s nomination because I am confident she will help us make progress in reforming this agency.”

Meanwhile, ACA International continues to ask for consideration of reform of the agency and other topics as the full Senate prepares to consider Kraninger to lead BCFP.

“ACA International is encouraged by the Senate committee’s consideration for new leadership at the Bureau of Consumer Financial Protection and remains focused on working with the bureau as it reviews its practices and rulemakings, especially for the accounts receivable management industry,” said Leah Dempsey, vice president and senior counsel of advocacy.”

Before Kraninger’s nomination hearing July 19, ACA International CEO Mark Neeb submitted a letter to Crapo and Brown outlining areas for consideration, including debt collection pre-rule activities, transparency in BCFP enforcement processes and support of legislation to improve its structure and operations, ACA previously reported.

“Since the inception of the bureau, there have been many instances where it has failed to fulfill its statutory mission and obligations, which require it to make markets for consumer financial products and services work in a fair, transparent and competitive manner,” Neeb said in the letter. “As the new leadership of the agency considers how to make improvements to bureau practices and as the Senate considers the nomination for a new permanent director, we look forward to continuing our engagement about issues that are important to the credit and collection industry.”

On Thursday the Senate Banking Committee also confirmed nominations for Kimberly Reed for president of Export-Import Bank; Elad Roisman as a member of the Securities and Exchange Commission; Michael Bright for president of Government National Mortgage Association; Rae Oliver for inspector general of the U.S. Department of Housing and Urban Development; and Dino Falaschetti for director of the office of financial research for the U.S. Department of the Treasury.

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