Late Saturday the White House announced President Trump’s “intent to nominate” Kathy Kraninger, an aide to Office of Management and Budget (OMB) director Mick Mulvaney, to head the Consumer Financial Protection Bureau (CFPB), where Mulvaney has also served as acting director since November
The White House issued the statement at 5 p.m. eastern on Saturday, a highly unusual move for the announcement of the intent to nominate a cabinet-level official who requires Senate confirmation.
One hour earlier, at 4 p.m. eastern Saturday, Breitbart News published an article titled “Report: Mulvaney Pushes Candidate Critics Say Is ‘Unqualified’ to Succeed Him at CFPB.”
“If the rumors are true about a mid-level manager at OMB for CFPB director, then the White House is going down a dangerous path of Harriet Miers 2.0,” J.W. Verret, professor of Banking Law at George Mason University’s Antonin Scalia School of Law and former chief economist for the House Financial Services Committee under chairman Jeb Hensarling (R-TX), tells Breitbart News in an exclusive interview.
I’m sure Ms. Kraninger is a great appropriations and budget person, but she has zero experience in financial regulation, much less consumer credit policy. In fact, this situation is worse than Harriet Miers because at least Ms. Miers was a lawyer and knew something about law when former President George W. Bush nominated her to become an associate justice of the Supreme Court back in 2005.
“Ms. Kraninger is simply unqualified to be the head of the CFPB because she has no experience in financial services or consumer credit,” Verret concludes.
Kraninger was unheard of as a possible pick at the CFPB until Friday, when the New York Times broke the story that she would be the likely nominee.
“The selection has drawn fire from both consumer groups and conservatives, which may hamper her support in the Senate,” CNBC reported on Sunday:
But consumer groups and conservatives alike were quick to criticize the announcement, with both sides questioning whether she was qualified and saying she may struggle to gain Senate approval as a result.
Allied Progress, a left-leaning consumer group, said Kraninger’s nomination was an attempt by Mulvaney to keep a grip on the agency, adding that she had “no relevant experience.”
J.W. Verret, an associate professor at the George Mason University Antonin Scalia Law School and financial regulation expert, said in an email that Kraninger was regarded in conservative Republican circles as very “smart,” but he also pointed to her lack of consumer finance experience.
As Breitbart News reported, “According to all publicly available information about Kraninger, she apparently has no professional or academic background in banking or credit regulation, the central job of the CFPB.”
Should Kraninger be confirmed as director of the CFPB by the Senate, she will begin a five year tenure at this constitutionally questionable independent agency that has, throughout its brief history, consistently overreached beyond its authority, according to numerous conservative critics. In addition, the director of the CFPB can only be removed by the president “for neglect or wrongdoing,” a limitation which makes the CFPB director potentially unaccountable to anyone.
In January, “A U.S. appeals court ruled . . . the president can only fire the agency’s head for neglect or wrongdoing and not just any reason, as the Trump administration sought,” Bloomberg reported:
The decision is likely be appealed to the U.S. Supreme Court by the administration and by PHH Corp., the New Jersey mortgage company that sued to dismantle the CFPB in 2015 after being hit with $109 million in fines for violating federal real estate transaction rules.
Earlier this month, the CFPB, under Mulvaney’s leadership, decided to “dismiss the PHH enforcement action” that prompted the lawsuit:
The decision comes one month after PHH Corp. has announced that it will not appeal a U.S. Court of Appeals ruling from January that ruled against the mortgage company’s efforts to challenge the constitutionality of the CFPB. That ruling overturned a 2016 decision from a panel of the court’s judges that declared the president had the authority to fire the CFPB director at will. PHH brought its lawsuit against the CFPB over a $103 million enforcement action issued by then-CFPB Director Richard Cordray in 2014, and the Court of Appeals reimbursed PHH over what it considered as an inappropriate fine as part of its January ruling.
In an exclusive interview with Breitbart News on Sunday, George Mason University’s Verret offered another reason why Kraninger’s intended nomination to head the CFPB is problematic.
“Consider the fact that she might be the CFPB Director under a future Democrat president without Mulvaney to back her up,” Verret told Breitbart News.
“That’s not a job that anyone who’s brand new to financial services policy can ever be expected to do, no matter how smart and dedicated they are,” Verret added.
The other risk associated with the nomination of Kraninger is that, lacking a track record in banking regulation and consumer finance, no one really knows if she is fully committed to the Trump agenda.
She was certainly not a financial supporter of President Trump during the 2016 Presidential primaries. Indeed, she financially supported two of his leading ideological critics, John Kasich, who she gave $500 to in 2016, and Jeb Bush, who she gave $500 to in 2015.
If the Senate rejects or returns Kraninger’s nomination to head the CFPB, or if the nomination is withdrawn, Mulvaney can serve as acting director into 2019, as Consumer Finance Monitor reported:
The 210-day period established by Section 3346(a) will expire for Mr. Mulvaney on or about June 22. As a result, assuming President Trump makes a nomination for CFPB Director before June 22, Mr. Mulvaney can continue to serve as Acting Director until the nominee is confirmed by the Senate.
If that nomination is rejected, withdrawn, or returned by the Senate, Mr. Mulvaney can continue to serve for another 210 days and assuming the President makes a second nomination within that 210-day period, Mr. Mulvaney can continue to serve until the second nominee is confirmed or for no more than 210 days after the second nomination is rejected, withdrawn, or returned.
Given the above, Mr. Mulvaney’s service as Acting Director could potentially continue into 2019. However, regardless of how long Mr. Mulvaney serves as Acting Director, there is nothing in the FVRA or the Dodd-Frank Act that would shorten the 5-year term of the new CFPB Director who is eventually confirmed.
With a narrow 51 to 49 majority in the Senate, Republicans can not afford to lose more than one senator’s support, if the Democrats stick together in opposition, if they want to assure Kraninger is confirmed, if she is nominated by the president, as is expected, before the June 22 statutory deadline.
Kraninger’s first stop in the nomination process will be the Senate Banking Committee, on which Sen. Elizabeth Warren (D-MA), the “intellectual godmother” of the CFPB, sits.
The White House appears to be gearing up for a lengthy nomination battle which they will win regardless of the outcome. If Kraninger is confirmed, their pick will be running the CFPB. If Kraninger is not confirmed, Mulvaney gets another 210 days to run the CFPB as acting director.