President Donald Trump's pick to lead the Consumer Financial Protection Bureau, Kathy Kraninger, is expected to face a contentious Senate confirmation hearing — if she ever has one.
On June 18, the White House officially nominated Kraninger, associate director of the Office of Management and Budget, to bring "much-needed management experience" to the consumer watchdog. In her current role, Kraninger serves as a top aide to OMB Director Mick Mulvaney, who is also interim head of the CFPB.
"As a staunch supporter of free enterprise, she will continue the reforms of the Bureau initiated by Acting Director Mick Muvlaney, and ensure that consumers and markets are not harmed by fraudulent actors," White House Deputy Press Secretary Lindsay Waters said in an email.
But some criticize Kraninger for having little to no experience in financial regulatory issues. Prior to working at the OMB, Kraninger worked at the Department of Homeland Security, and before that, she was a committee staffer for Republican Sen. Susan Collins of Maine.
Sen. Elizabeth Warren, the Massachusetts Democrat who helped create the bureau, tweeted June 19 that Kraninger "has no track record of helping consumers."
J.W. Verret, formerly chief economist and senior counsel for the GOP side of the House Financial Services Committee, said the Trump administration was "mistaken" in picking Kraninger, citing a lack of experience. "That's the best they've got? Their best line is 'management,'" Verret, now an assistant law professor at George Mason University, said in an interview.
Among Kraninger's supporters is House Financial Services Committee Chairman Jeb Hensarling, R-Texas, who said Kraninger's experience at OMB is "desperately needed at an agency which has been plagued with cost overruns and unnecessary spending."
Eric Johnson, a partner at law firm Hudson Cook, said Kraninger has some financial regulatory experience through her time with Collins, who was the commissioner of the Maine Department of Professional and Financial Regulation in the late 1980s. "With that background, she can pick up on the financial services piece of it in job training," Johnson said in an interview.
Mulvaney on June 19 said Kraninger has experience in "navigating and interpreting how the federal government supports regulates financial services for key stakeholders," adding that he expects Kraninger to continue his efforts to "rein in the bureaucracy."
American Bankers Association President and CEO Rob Nichols said he "look[s] forward to learning more about her views on specific regulatory issues," an opportunity that will come after she is formally nominated and scheduled to testify to the Senate Banking Committee.
But some say that hearing may never come, postulating that the pick was designed to keep Mulvaney, a well-liked leader among conservatives, at the helm of the agency at least through the end of the year. Because of federal law on administrative vacancies, Mulvaney could only serve as acting director until June 22. But because Trump has now nominated someone, Mulvaney can technically remain in his post until the nominee is confirmed.
The nomination could keep Mulvaney in place while Congress focuses on the 2018 midterm elections, meaning that movement on Kraninger's potential confirmation may not come until late 2018 at the earliest.
Alan Kaplinsky, a partner with Ballard Spahr who heads the law firm's consumer financial services group, added that the nomination means Mulvaney could effectively serve in the role until the next presidential election in 2020.
Even if Kraninger gets her hearing, some are doubtful she will be confirmed. "The odds are less than 50-50 that she'll ever serve," Kaplinsky said in an interview.
Compass Point analyst Isaac Boltansky wrote in a note June 18 that Kraninger has 40% odds of being confirmed, pointing to the uncertain votes of moderate Republicans and concerns that Senate Majority Leader Mitch McConnell, R-Ky., may see the nomination as low-priority with Mulvaney still at the lead. But Boltansky said the nomination is ultimately a "win-win" for the White House, since the confirmation will either solidify a permanent CFPB director for five years or keep Mulvaney in an acting role for at least the rest of the year.