President Donald Trump announced this morning that he plans to nominate Kathy Kraninger, associate director of the Office of Management and Budget (“OMB”), to become the new director of the Consumer Financial Protection Bureau (“CFPB”), replacing Mick Mulvaney.
The announcement came as a surprise to many because Kraninger’s name was not among those that had been circulated as possible candidates to head the CFPB and her previous experience did not center on consumer protection and financial regulatory issues. Kraninger, 43, is a Pittsburgh native and graduate of Marquette University and Georgetown Law School. Her primary experience includes serving as the Clerk for the Senate Appropriations subcommittee on Homeland Security, including overseeing the Department of Homeland Security (“DHS”) budget (and the budgets for four other agencies) while at OMB. Kraninger also served as deputy assistant for policy at DHS.
Based on the law that permitted Mulvaney to serve as interim Director, Mulvaney would have otherwise been required to leave his post at the CFPB on or before June 22, 2018, if a permanent director had not been nominated. Kraninger’s nomination, however, triggers a provision in the Federal Vacancies Reform Act that allows Mulvaney to serve until the Senate confirms or rejects the pick. That process is expected to be lengthy, taking months.
The CFPB post has been subject to significant drama since former democratic Director Richard Cordray departed, with Cordray appointing Deputy Director Leandra English to fill his seat. Within hours of Cordray’s resignation announcement, however, Trump appointed Mulvaney under the Federal Vacancies Act to succeed Cordray. English then sued, but the federal district court denied her request for a temporary restraining order and preliminary injunction. The matter remains tied up in litigation on appeal.
A White House spokesperson said Kraninger was selected because “[s]he will bring a fresh perspective and much-needed management experience” to the CFPB, “which has been plagued by excessive spending, dysfunctional operations, and politicized agendas.”
The selection of Kraninger is likely to trigger the latest rounds of fights over the leadership of the CFPB, with trade groups for financial services companies lining up in support while opponents are focusing on her lack of experience in consumer financial protection matters. Troutman Sanders LLP will continue to monitor these developments.