Senate panel OKs Trump pick to lead consumer bureau

WASHINGTON — The Senate Banking Committee on Thursday approved Kathy Kraninger as director of the Consumer Financial Protection Bureau, as Republicans overlooked the protests of Democrats who said President Donald Trump’s nominee is unqualified to lead the consumer watchdog.

Kraninger’s nomination received approval in a 13-12 party-line vote. The nomination now goes to the full Senate for a vote.

Kraninger, currently a midlevel executive in the Office of Management and Budget, works directly under Mick Mulvaney, who is both Trump’s budget director and has been acting director of the bureau since late November.

Mulvaney has moved to roll back many of the rules and regulations established by the bureau, which was formed in the wake of the financial crisis. Kraninger has given little guidance on how she plans to run the bureau, but she’s expected to operate the bureau similarly to Mulvaney.

Since opening in 2011, the

bureau has helped consumers obtain about $12 billion in refunds and debt relief from financial institutions. It also played a key role in penalizing Wells Fargo & Co. for its creation of unauthorized accounts.

During her July confirmation hearing, Kraninger pledged to uphold Congress’ mandate that the bureau ensure that all consumers have access to financial products and services that are “fair, transparent and competitive.”

She said she would do that in part by making “robust use of cost-benefit analysis,” an approach favored by Republicans. Democrats argue that it can be manipulated by industry and create roadblocks to quickly enacting important regulations.

“Will Kathy Kraninger stand up against powerful special interests and fight for service members, students and seniors that need a champion? Unfortunately, the answer is no,” said Sen. Catherine Cortez-Masto, D-Nev.

Democrats tried to derail Kraninger’s nomination by focusing on her work in the White House’s budget office, where she handled the budgets for the Department of Homeland Security and several other large agencies. Human services was the department in charge of the policy to separate children from their parents at the border and the recovery from Hurricane Maria in Puerto Rico. Democrats complained that Kraninger would not detail her role in those policies during her confirmation hearing or in written questions.

“She is refusing to describe her role in two very public management failures because she knows it would destroy her case for her nomination,” said Sen. Elizabeth Warren, D-Mass.

Republicans argued that Kraninger, as a mid-level bureaucrat, had little to do with those policy decisions and she should be instead judged on her ability as a manager.

Senate Banking Committee Chairman Mike Crapo, RIdaho, said Thursday that she had “significant leadership experience at federal agencies

and on Capitol Hill.” He said her “her depth and diversity of public service experience” gave him “confidence she is well prepared to lead the bureau.”

At the Office of Management and Budget, Kraninger oversees spending at five agencies, including the Department of Homeland Security.

The bureau has been a source of political controversy since its creation. Republicans see the bureau has an unaccountable federal agency that has too much independence and power and should be reined in, while Democrats say consumers need an agency that stands up to big banks and high-interest payday lenders and it must be independent in order to make tough decisions.

Trump installed Mulvaney in the director position temporarily after the resignation of the bureau’s first director, Richard Cordray, in a controversial move that led to protests and a legal challenge from Cordray’s chosen successor, Leandra English. English, who has been the bureau’s deputy director, resigned in July and dropped her legal fight.

Mulvaney, who had been an outspoken critic of the agency, has scaled back the bureau’s enforcement efforts, urged Congress to reduce its authority and made the agency more friendly to the financial services industry. This month, The New

York Times reported that Mulvaney was planning to suspend the bureau’s routine examinations of lenders for violations of the Military Lending Act, which protects service members and their families from predatory lending and other financial fraud.