New Consumer Bureau Chief Will Glean Priorities From Listening Tour

On her first day as the permanent director of the Consumer Financial Protection Bureau, Kathy Kraninger said her talks with staff and stakeholders show that many are glad that certain decisions were slow-walked by her acting predecessor—President Trump’s budget director Mick Mulvaney.

“The staff is excited to have a full-time director,” she told reporters after a morning that included meetings with operations and policy directors, an ethics briefing, calls to Congress and lunch in the cafeteria with rank and file staff that included research assistants. Industry, Congress and consumers “who’ve been waiting for new decisions are grateful to the acting director for waiting.”

Though Mulvaney, with whom she worked for nearly two years at the Office of Management and Budget, “was a fantastic boss,” he came part-time to the CFPB “under different circumstances, with a new administration and challenging dynamics, which is a different posture than coming in full-time with a five-year term,” she said.

She will be “fully accountable, and the decisions are mine,” she said in a session in the bureau’s conference room.

Kraninger, a homeland security specialist at OMB who narrowly cleared the Senate last week in a 50-49 vote, said her priorities will be determined after a three-month “listening tour” of the bureau’s field offices. They include sites in San Francisco, Chicago and New York (the Southeast office, currently in Washington, D.C., will move to Atlanta, she noted.) It’s important to “meet with state regulators, other federal regulators and consumer advocates,” she added.

One area of focus, she predicted, will be “data security and data privacy—what is collected, how it is used, and what information is appropriately shared,” she said. “I have a lot of interest in the resources of the agency and how important it is that they be well utilized” by the bureau’s 1,500 employees in six divisions.

Kraninger said she hoped to schedule a meeting with Rep. Maxine Waters, D-Calif., a fierce critic of Mulvaney’s approach who is slated to chair the House Financial Services Committee in January. “We want a productive relationship with Congress, a critical stakeholder, and will do the utmost at the agency to be transparent and accountable,” Kraninger said.

The recent controversy over Mulvaney’s decision to rename the bureau using its literal statutory name—the Bureau of Consumer Financial Protection—deepened recently when a leaked staff document suggested the name change may cost industry $300 million. “I care more about what the agency does than what it is called,” Kraninger said. Though she said she understands Mulvaney’s reasoning, she “also understands the brand and identity concerns of employees, many of whom were caught off guard” by the name change, which remains a work in progress, she noted. “There are resource implications to going back” to the old name, which she will weigh. “It’s a near-term decision.”

Asked about pressure from outside critics to fire Mulvaney’s fair lending enforcement chief, Eric Blankenstein, who was revealed to have posted social media messages years ago with racial overtones, Kraninger said, “I have no intention of making a personnel decision in my first day, and personnel matters are confidential.” She does not plan, she added, to go back and review “everything the 1,500 employees have ever written.”

Kraninger said her 20-year career path has included managing career staff, and that “there is an appropriate role for both [career and political employees] at the agency.” She said she will listen and give feedback to both career and political staff, when asked about possible tension. “We will [do] what is in the best interest of the agency going forward, with the best information for the consumer, [and] we will come to the right answer at end of the day,” she added, an answer that she “hopes will look good in history.” 

Though sympathetic to criticism that the bureau in the past has relied too much on litigation and enforcement over guidance, Kraninger conceded that “enforcement is invaluable to the agency mission, and is one of the tools Congress gave us.” For the most part, the financial “industry wants to comply, and the bureau should provide the information. But where there are bad actors, we will take enforcement action to the full extent of the law.”

Asked whether her consultation with staff and stakeholders would include a meeting with Richard Cordray, the CFPB’s first director who left for what turned out to be an unsuccessful campaign for governor in Ohio, Kraninger said, “In just about every job, I have talked to my predecessor.  So I expect it will happen.”