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Blog: Trump makes surprise pick to lead CFPB

Kathy Kraninger could become the next director of the Consumer Financial Protection Bureau (CFPB), arguably the most powerful financial-services regulator in Washington.

Or she could simply serve as a placeholder nominee, allowing the CFPB acting director and Kraninger’s current boss, Mick Mulvaney, to remain in charge of the bureau for several more months.

cfpbnomineePresident Donald Trump nominated Kraninger over the weekend. She was a surprise pick, a largely unknown White House aide who is the associate director for general government at the Office of Management and Budget, where Mulvaney is the director.

It is not clear if Kraninger will ever be confirmed by the Senate for the five-year term, making her the second permanent director of the agency. The opposition is expected to be stiff, and Trump’s nominees have already been given a rough ride.

The nomination has already drawn fire from Democrats, and consumer-advocacy groups on the left. Sen. Elizabeth Warren, D-Massachusetts, who is often given the credit for creating the CFPB, indicated she would attempt to block Kraninger’s nomination until she explained her role in the administration’s immigration policy, the Hill reported. It also remains to be seen if she will gain universal support from Republicans in the Senate, who hold a razor thin majority.

Kraninger’s experience is mostly confined to budget issues and homeland security, and she does not have a background in consumer protection. As has been pointed out by the Los Angeles Times and other major media outlets, the  nomination diverges from Trump’s normal practice of appointing people with high-level government or private-sector experience to top financial regulatory posts.

Industry trade groups, such as the Mortgage Bankers Association (MBA), were quick to congratulate her, however. MBA, for example, issued a news release urging the Senate to engage in “a fair and thorough confirmation process to begin as quickly as possible quickly.”

The timing of the appointment is more obvious. Mulvaney, as acting director, was appointed by Trump on Nov. 25, after Richard Cordray resigned. The Federal Vacancies Reform Act, the statute on which Trump relied to appoint Mulvaney, allows an individual to serve as acting director for 210 days. Mulvaney’s allowed time was slated to expire on June 22, this Friday.

By appointing Kraninger, Mulvaney can now remain in charge of the bureau pending the Senate’s confirmation of her. If Kraninger’s nomination were to be rejected or withdrawn, Mulvaney could continue in his role as acting director for another 210 days, pending another nomination, according to an analysis by the Washington, D.C.-based law firm of Ballard Spahr.

So Kraninger’s nomination, whatever the motivation for it being advanced, provides a convenient way to keep Mulvaney in charge of the CFPB for an extended period, where he is free to continue his aggressive reforms from within the agency. 


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