Kathleen Kraninger (LAW ’07) was confirmed as the new director of the Consumer Financial Protection Bureau by the U.S. Senate in a 50-49 vote Dec. 6.
Kraninger, who was nominated by President Donald Trump and sworn in Monday, replaces Acting Director Mick Mulvaney (SFS ’89), who is also the director of the Office of Management and Budget.
The position was vacant after former President Barack Obama’s appointed director, Richard Cordray, stepped down in November 2017 and installed his deputy as the replacement director. The move created a standoff with the Trump administration, which had simultaneously appointed Mulvaney as acting director of the CFPB.
This prompted a dispute over who had the authority to fill the interim position: Trump under the Federal Vacancies Reform Act, which allows the president to temporarily appoint officers of an executive agency, or Cordray under the Dodd-Frank Act, which formed the CFPB.
The CFPB was created after the 2008 financial crisis to hold companies in the finance industry accountable and protect consumers’ interests.
Kraninger said she hopes to reduce the bureau’s spending and prioritize individual privacy in a July 19 opening statement before the Senate Committee on Banking, Housing and Urban Affairs.
“Under my leadership, the bureau would limit data collection to what is needed and required under law and ensure that data is protected,” Kraninger said. “The bureau must be accountable to the American people for its actions, including its expenditure of resources.”
Kraninger is one of several Georgetown alumni to serve as political appointees under Trump, including White House Chief of Staff John Kelly (GRD ’84), Secretary of Homeland Security Kirstjen Nielsen (SFS ’94), former White House Chief Strategist Steve Bannon (GRD ’83) and U.S. Trade Representative Robert Lighthizer (CAS ’69, LAW ’73).
Kraninger most recently served as the associate director of general government programs at the OMB. She has also held positions as a clerk for the Senate Committee on Appropriations and as deputy assistant secretary for policy at the Department of Homeland Security.
Her narrow confirmation was generally welcomed by Republicans, who said her breadth of management experience qualified her for the position, but opposed by Democrats, who contended that she did not have experience regulating the financial sector, according to NPR.
As the associate director of the OMB, Kraninger oversaw the Trump administration’s controversial Puerto Rico disaster relief efforts and policy of family separation at the border. During her confirmation hearing, Democrats pressed Kraninger to describe her role in formulating those policies, but she declined to comment, according to Politico.
Critics of Kraninger argue her lack of financial regulation experience undermines the independence and strength of the bureau.
Sen. Elizabeth Warren (D-Mass.), who spearheaded the bureau’s creation in 2010, circulated a Nov. 27 letter to her Senate colleagues opposing Kraninger’s nomination and confirmation.
Kraninger would “undermine the agency’s consumer protection mission and return to the pre-crisis approach,” Warren wrote. “A vote to confirm Ms. Kraninger is a vote to defang the consumer watchdog.”
During his time in office, Mulvaney scaled back the bureau’s enforcement activities. Mulvaney also asked Congress to assume control of the bureau’s budget and give the president more control over its director, according to NPR.
“He wants me to get it back to the point where it can protect people without trampling on capitalism,” Mulvaney said at a Nov. 2017 press conference.
Mulvaney also began the process of changing the name of the CFPB to the Bureau of Consumer Financial Protection.
Trump called Kraninger the “right leader at the right time,” crediting her ability to hold the CFPB accountable for overspending during Cordray’s term because of her background in policy and management.
“The BCFP has been the subject of numerous congressional investigations due to its poor management and employment practices, reckless spending and violations of due process,” Trump said in a July 19 news release.
Rep. Jeb Hensarling (R-Texas), chairman of the U.S. House of Representatives Financial Services Committee, expressed his support for Kraninger.
“We have seen some of that good under the leadership of acting Director Mulvaney, and I have no doubt that will continue under the leadership of Kathy Kraninger,” Hensarling said in a June 18 news release.
Kraninger inherits an internal investigation of a senior official at the CFPB who posted racially charged blog entries in 2004. She declined to comment on the official’s future on her first day as director, according to The Washington Post.