Kathy Kraninger, President Trump’s nominee to become director of the Consumer Financial Protection Bureau (CFPB), deserves swift Senate confirmation, despite Democratic attempts to block her appointment. Her confirmation hearing will be held Thursday before the Senate Banking, Housing and Urban Affairs Committee.
The CFBP is was created in 2011. From its inception, the agency was more of a pet project of Sen. Elizabeth Warren, D-Mass., than it was an agency to actually protect consumers. It quickly became a powerful regulatory hammer in the service of Democratic Party interests.
Now that there is a Republican president in the White House, the political shoe is on the other foot. It is clear that the battle for control of the agency that ensued last November will likely continue for the remainder of this year. It is a fight that has very little to do with the day-to-day tedium of CFPB policy.
Instead, the fight to control the agency is between its Democratic creators – who want more political power and government regulation – and Republican reformers who demand accountability and transparency for what was formerly a rogue, partisan operation.
Only after the departure of the CFPB’s first director, Richard Cordray – now running as the Democratic candidate for governor of Ohio – were we able to identify just how widespread the abuse and mismanagement was at the agency under his leadership.
First, there were revelations made by former CFPB Enforcement Attorney Ronald Rubin that a Democratic advertising firm that worked for both President Obama and Hillary Clinton’s election campaign was “the sole recipient of the CFPB’s $43 million advertising expenditure since 2013.”
Then there were the news stories about exorbitant cost overruns related to the renovation of CFPB’s Washington headquarters for about $215 million.
Even the Federal Reserve Board’s inspector general said of that project that "the approval of funding for the renovation was not in accordance with the CFPB’s current policies for major investments” and that “a sound business case is not available to support the funding of the renovation.”
Finally, there were the millions of dollars the CFPB doled out of its Civil Penalty Fund – collected from fines levied on corporations for alleged financial abuse – that went to third-party “consumer advocacy” groups tied to Democrats.
When Director of the Office of Management and Budget Mick Mulvaney became acting director of the CFPB in November – following Cordray’s resignation to begin his race for governor in Ohio – Mulvaney started instituting immediate reforms. These included requesting zero dollars for the agency for the second quarter of the 2018 fiscal year and putting a 30-day freeze on new regulations.
It was no surprise that Sen. Warren and other Democrats were outraged. Now they are taking out their anger on Kraninger, opposing her nomination to head the CFPB.
Kraninger is a talented and trusted associate of Mulvaney at the Office of Management and Budget and clearly qualified to lead the CFPB. After President Trump nominated her for the job, Sen. Warren immediately went on the attack and has threatened to hold up her nomination over, of all things, Kraninger’s suspected role in promoting President Trump’s immigration policies.
What does this have to do with the mission of the CFPB? Warren is just seizing on any excuse to oppose a Trump nominee in her effort to politicize the CFPB.
At her confirmation hearing Thursday, Kraninger will no doubt face tough questions from Warren and others about her experience and ability to lead one of the most powerful agencies in the federal government. The CFPB is led by a single, autonomous director who is difficult to remove, has no oversight from Congress, and isn’t held accountable to the companies it fines or the public it is entrusted to protect.
No doubt, Warren will try to viciously smear Kraninger. The recent attacks Democrats have leveled against Kraninger are only a prelude to their fight to keep an iron grip on an agency that serves as a political slush fund for their allies.
However, Warren’s Senate colleagues and the public would be wrong to take the bait. For Warren, the fight over the CFPB isn’t about policy at all. It is a tantrum being thrown over the prospect that she may lose her stranglehold over an agency that, in her eyes, belongs to her.
In a response to Warren’s attacks, Mulvaney noted to the senator: “You originally conceived of this agency as one that should be ‘free of legislative micromanaging’ and recently reiterated that ‘the whole idea’ of the Bureau was to ‘insulate it from political influence to the extent possible,’ but I think most folks would interpret that exactly as I am suggesting: less accountable and less transparent.”
The CFPB is a highly political agency. I personally believe it should be abolished; but while it still exists it needs strong, market-oriented, and fiscally sane leaders who can cut it down to size and restore some form of transparency and constitutional accountability.
Kathy Kraninger is a believer in a limited and constitutionally accountable government, as are Mick Mulvaney and President Trump. What we need now isn’t political posturing. We need a strong and steady administrative hand to continue cleaning up the mess created by Elizabeth Warren and Richard Cordray.