USA TODAY International Edition
Our view: Financial watchdog agency is no place for neophyte
You wouldn’t take your car to an auto mechanic who never repaired one. Nor would you get surgery from someone who didn’t go to medical school.
But if President Donald Trump has his way, someone with zero experience regulating or overseeing financial institutions will be charged with protecting American consumers against scams by banks, loan issuers, debt collectors and other financial players.
As early as next month, the Senate could confirm Trump nominee Kathy Kraninger as director of the Consumer Financial Protection Bureau (CFPB), the nation's chief financial watchdog. Created in the wake of the 2008 financial collapse, it has stood up for the little guy by collecting nearly $12 billion in relief from the financial industry for millions of consumers.
Leadership of a financial reform bulwark created in response to the Great Recession isn’t the post for a neophyte to learn on the job. But at a hearing of the Senate Committee on Banking, Housing and Urban Affairs on her nomination last month, Kraninger acknowledged that is just what she is. She has no experience in overseeing or regulating banks or credit unions. She has never brought legal action against a payday lender or credit card company.
While Kraninger has worked in government for more than 20 years and is now associate director for general government at the Office of Management and Budget, experience in the right field counts. And lack of it ought to be disqualifying.
Indeed, Richard Cordray, the bureau’s previous director, had been the Ohio attorney general before heading the CFPB. As Ohio attorney general, he made enforcing consumer protection laws a priority, fought mortgage fraud, and filed suits against major credit-rating agencies whose actions cost Ohio retirement funds millions.
If senators can’t judge Kraninger on a record of protecting consumers or supervising financial institutions, at least they should know the broad outlines of how the White House budget official plans to lead the new agency. But at the very hearing where Kraninger admitted her lack of experience, she failed to be forthcoming about what she’d do as director of the consumer watchdog. Instead, she evaded question after question on key issues from student loans to payday lending.
The Senate and the public know little more about Kraninger today than they did before the hearing.
Presidents deserve wide latitude in choosing agency heads to carry out their mission in line with the administration’s priorities. And USA TODAY has a long history of supporting those choices even when we disagree with the views of particular nominees.
But the public should be able to demand, at a minimum, that the leaders of powerful regulators charged with vital government functions have a passing acquaintance with the industry that is their agency’s focus. Kathy Kraninger doesn’t meet even such a low standard. That is reason enough for the Senate to reject her.