Nominee for consumer director moves forward after partisan committee vote of 13-12

The nomination of the next director of the federal consumer financial protection agency was recommended favorably, narrowly and along partisan lines (and after withering criticism by Democrats) by a Senate committee Thursday. The next step is consideration by the full Senate.

Senate Banking Committee Chairman Mike Crapo (R-Idaho) (left) and Ranking Member Sherrod Brown (D-Ohio) listen to committee members’ comments Thursday during consideration of Kathy Kraninger nomination to be director of the BCFP.

By a 13-12 vote – with only Republicans voting “yes” – the Senate Banking Committee voted to send the nomination of Kathleen (“Kathy”) Kraninger to the full Senate with a favorable recommendation to be permanent director of the Bureau of Consumer Financial Protection (BCFP, formerly known as the CFPB). If Kraninger’s nomination is confirmed by the full Senate, she would replace Acting Director John (“Mick”) Mulvaney, who has led the agency since November. Kraninger would succeed Richard Cordray as permanent director, who resigned in November.

Only two Republican members of the committee made statements in support of Kraninger at the hearing: Chairman Mike Crapo (Idaho) and Mike Rounds (S.D.). Crapo noted Kraninger’s experience in budget and oversight in backing her nomination. Rounds cited her “outstanding record of public service.” He criticized the current single-director governance of the agency and urged that it be changed to a multi-member commission, with its budget subject to congressional oversight through the appropriations process. He said he believed that Kraninger would help in reforming the agency, which he said needed to be “reined in.”

Democrats strongly criticized Kraninger’s lack of experience in consumer protection, with six members of the committee offering statements in opposition to her nomination. Ranking Member Sherrod Brown (Ohio) called Kraninger in “a class by herself,” adding that she had “no – zero – experience” in consumer affairs, and he asserted that Kraninger said after her hearing with the committee last month that she could not “think of a decision Mulvaney has made with which she disagrees.”

Brown, and several other Democrats, cited a decision made recently by the agency that it would no longer monitor banks, payday lenders and others for compliance with the Military Lending Act (MLA). The Democrats claimed that Kraninger has been silent on the decision, with Sen. Jack Reed (Rhode Island, and ranking member on the Armed Services Committee) saying he had “no confidence she will try to reverse” Mulvaney’s decision on MLA, “which is designed to protect the men and women of the armed services.”

Sen. Catherine Cortez-Masto (Nevada) noted that, under Mulvaney, the bureau’s Consumer Advisory Board (CAB) had been disbanded. “Consumers will ask, ‘who is fighting for me?’ She has no experience,” she said, adding that confirming her “will do a disservice to the people who we talk about every single day.”

In other action, the committee reported favorably the nomination of Dino Falaschetti to be director of Treasury’s Office of Financial Research (OFR). The voice vote was not unanimous, with some Democrats shouting “no.”