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U.S. lawmakers set to grill Trump’s consumer watchdog pick

By Katanga Johnson | Jul 19, 2018

WASHINGTON (Reuters) - Fireworks are expected in U.S. Congress on Thursday when lawmakers question Kathy Kraninger, a senior government official and President Donald Trump’s pick to lead the consumer watchdog created after the 2007-2009 financial crisis.

Kraninger will be quizzed by U.S. senators to prove she has adequate experience to lead the Consumer Financial Protection Bureau (CFPB). Democrats have said she lacks relevant experience and even some Republicans have questioned her familiarity with consumer finance issues she would be tasked with policing.

Republicans have criticized the agency for what they say is regulatory overreach. Kraninger said in prepared remarks she would focus on improving CFPB processes and operations, including weighing rules more carefully and better managing spending.

Kraninger, 43, is a senior official at the White House’s Office of Management and Budget (OMB). She has extensive government managerial experience including at the Department of Homeland Security (DHS), which she helped set up, and at OMB where she manages the financial regulation portfolio, according to her biography.

But the success of her confirmation will rest heavily on her performance before the Senate Banking Committee on Thursday, during which Kraninger will have to answer to progressive Democratic Senators Sherrod Brown and Elizabeth Warren.

The two lawmakers have said Kraninger lacks experience and last month demanded she clarify her involvement in Trump’s “zero-tolerance” immigration policy that separated more than 2,000 children from their parents.

On Tuesday they called unsuccessfully on the committee’s chair, Republican Senator Mike Crapo, to postpone the hearing until they got a response.

“There are always some who will say anything in order to create controversy where none exist. She is well qualified to lead the (CFPB) and she will do a great job protecting American consumers,” White House spokeswoman Lindsay Walters said on Wednesday.

The CFPB has been under attack from Republicans who say the independent agency created by Congress to protect consumers from abusive lenders has over-stepped its legal statute.

The agency’s acting head Mick Mulvaney is also the OMB chief and works closely with Kraninger. He took over at the CFPB from President Barack Obama’s appointee Richard Cordray in November, and the agency has since dropped cases against payday lenders, shelved proposed regulations and overhauled some units.

Kraninger will say she wants to ensure the bureau is “fair and transparent” and thoroughly assesses the costs and benefits of new rules, according to prepared testimony published ahead of the hearing.

She will also emphasize the importance of working closely with other federal and state regulators, protecting data the bureau collects and making the CFPB more accountable for its spending.

“Under my stewardship, the bureau will take aggressive action against bad actors who break the rules by engaging in fraud and other illegal activity,” she will add.

Some Republican senators including Crapo and Pat Toomey have backed Kraninger’s nomination. But other conservatives have raised concerns that her lack of consumer finance experience will hurt her confirmation chances.

“If she fails to clear this hurdle, her nomination ... will falter and fail, which would consequently leave acting director Mulvaney atop the agency into 2019 and possibly beyond,” said Isaac Boltansky, director of policy research at Washington-based Compass Point Research and Trading, in a note.

 

 

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