The leadership situation at the Consumer Finance Protection Bureau (CFPB) has been something of a complicated story since original Director Richard Cordray stepped down last fall. On his way out the door, Cordray appointed Deputy Director Leandra English to the position, in the name of operational efficiency and a smooth changeover.
“In considering how to ensure an orderly succession for this independent agency … I have also come to recognize that appointing the current chief of staff to the deputy director position would minimize operational disruption and provide for a smooth transition given her operational expertise,” Cordray noted in a statement.
But President Donald Trump had different ideas about the position – not to mention a different take on the desirability of a shake-up at the CFPB – and instead moved to appoint Mick Mulvaney, White House Director of the Office of Management and Budget (OMB) as the acting CFPB director. Mulvaney was a longtime critic of the CFPB at the time he took the role, and famously called the agency a “sad, sick joke.”
From there, it became a matter for the lawyers as the issue went to court. English's attorneys maintained that the enabling legislation for the CFPB, Dodd-Frank, makes it clear that in the event of the departure of its leader, the deputy director of the organization – in this case, English – becomes the interim head of the CFPB. Lawyers for Mulvaney maintained that the law is not that explicit, and that the president retains the power to appoint both the interim and full-time head of the CFPB as part of his standard executive powers.
The case had been heading through the courts, with Mulvaney's side of the argument winning the early rounds of the legal battle. But the battle ended abruptly earlier this month when English withdrew her suit and resigned her position at the agency, following President Trump's June announcement that he had made his choice for full-time head of the CFPB: Kathy Kraninger.
“Now that President Trump has decided to seek Senate confirmation of a new director for the independent Consumer Financial Protection Bureau, Ms. English is stepping down and we intend to file court papers on Monday to bring the litigation to a close,” said her lawyer, Deepak Gupta, in a statement.
So ends that leadership battle for the CFPB.
But is a new one beginning?
Kraninger, like interim director Mulvaney, comes from the OMB, where she is associate director for general government programs. In that capacity, she oversees a $250 billion budget across seven Cabinet departments, including the Department of Homeland Security and the Department of Justice. Her nomination caught watchers on both sides of the aisle by surprise, because her background is more in homeland security than financial services.
Kraninger has “neither experience as a regulator nor expertise in consumer financial issues,” Bartlett Naylor, a financial policy advocate at consumer advocacy group Public Citizen, told the Los Angeles Times at the time of her nomination. “The nation’s leading consumer financial regulator is not an entry-level job."
And while Democrats were more vocally opposed, even Republican and right-leaning industry experts were surprised by the appointment. J. Mark McWatters, the administration chair of the National Credit Union Administration, had been thought to be a more likely choice for the job.
J.W. Verret, a George Mason University professor and former chief economist for Texas Republican Rep. Jeb Hensarling, described Kraninger as a “mid-level budget staffer lacking expertise, chosen to lead one of the most powerful agencies in the government" shortly after he nomination was announced.
But while hostility among Democrats has clearly not died down, opposition among Republicans seems to have flattened out in the month or so since Kraninger was announced for the position. During her hearings with Senate Banking Committee members last week, she confirmed that her policy ideas are more in line with the pro-business policies put in place during the Mulvaney era as opposed to during the Cordray era, though she offered no specific policy views.
Democrats hit often on her lack of experience, but Republicans seemed broadly supportive and offered no such questioning of her background. Republicans' questions and comments were focused on the "unaccountability" of the CFPB, and how Kraninger's experience in management qualifies her to lead. Given the division of the Senate at present, Republicans have sufficient votes on their own to advance Kraninger to the job. Once in it, she could only be removed for cause, as the CFPB director is unique among powerful agency heads in that they do not serve at the will of the president.
Plus, experts have noted, trying to delay Kraninger's appointment doesn't really help Democrats ideologically, since doing so would only leave Mulvaney at the top of the organization for longer, a situation they have made clear that they do not like or find acceptable.
“It’s heads we win, tails they lose,” Chuck Gabriel, president of the research firm Capital Alpha Partners, noted in a conversation with Vox. “I think she reflects the downscaling of the weight and range of movement that Republicans envisioned for that bureau.”