After lingering in the nomination queue since summer, the Senate on Thursday narrowly voted its confirmation of Kathy Kraninger as the next director of the Consumer Financial Protection Bureau.

The final vote of the full senate: 50-49.

Kraninger, 43, previously worked for the Department of Homeland Security and for the Senate Appropriations Committee’s Homeland Security Subcommittee. Since March 2017, she has served as associate director for general government at the Office of Management and Budget, where she monitored approximately $250 billion in budgetary resources for cabinet-level departments and federal agencies. A native of Pittsburgh, she is a graduate of Marquette University and Georgetown Law School.

Acting Director Mick Mulvaney’s tenure as current head of the agency was intended to end, by statute, on June 22.

At the time of her nomination, in June, a statement by the White House said Kraninger would “bring a fresh perspective and much-needed management experience” to the Bureau, claiming that it “has been plagued by excessive spending, dysfunctional operations, and politicized agendas.”

“As a staunch supporter of free enterprise, she will continue the reforms of the Bureau initiated by [Mulvaney] and ensure that consumers and markets are not harmed by fraudulent actors,” it added.

As Kraninger steps into the role, she faces both vociferous critics and conservative fans of the business-friendly approach of the man she replaces. Actions during Mulvaney’s tenure included slashing the agency’s budget, attempting to halt the enforcement of rules aimed at payday lenders, setting the stage to end the Bureau’s public consumer complaint database, and disbanding public advisory groups.

Mary Jackson, CEO of the Online Lenders Alliance (OLA), falls into the supporter category.

“Her extensive experience in both the Executive Branch and as a senior Congressional staffer brings a unique skill set that will enable the Bureau, under her leadership, to stay focused and on track as it tackles the many pressing issues facing consumers,” Jackson said. “Through her work at OMB and a distinguished public service career, Kraninger has demonstrated that she is the right person for the job.”

OLA bills itself as the first FinTech trade association, representing the growing industry of companies offering loans online. That mission statement factored into Jackson’s optimism regarding the confirmation.

“FinTech is delivering a host of convenient and affordable credit options for qualified Americans, and we look forward to working with her on strong and clear policies to allow that innovation to continue,” she said.  “People need and deserve access to reliable credit, and we need a system that preserves that opportunity.”

Critics of the confirmation included, as expected, Sen. Elizabeth Warren (D-Mass.), an architect of the CFPB who shepherded its creation into the Dodd-Frank Act.

“Kathy Kraninger has no interest in fighting for American families & zero experience standing up for consumers,” Warren tweeted. “The @SenateGOP just voted to put her in charge of the @CFPB anyway. Kraninger may be on the side of cheating companies, but I won't stop fighting for working families.”

“Kathy Kraninger has no consumer protection or financial regulation experience. We expect her to simply follow Mick Mulvaney’s playbook. While the CFPB’s current leadership has abandoned its mission, we’re grateful that several states are taking action to make sure companies don’t take advantage of consumers.”

Ethan Lutz, Consumer Fellow, U.S. PIRG

Lisa Donner, executive director of Americans for Financial Reform, echoed those concerns.

“The Senate majority has endorsed a CFPB nominee indistinguishable from Mick Mulvaney, who has done his level best to dismantle from within an agency that once won real results for American families hurt by Wall Street and predatory lenders,” she said.

Opining that, during the past year, the CFPB “has strayed from its mission,” U.S. PIRG has released a new report “highlighting how state and local governments are filling the void to defend consumers from unfair financial practices.”

“Ever since President Trump installed Office of Management and Budget Director Mick Mulvaney as the acting director of the CFPB 13 months ago, the agency has at best stalled on protecting consumers, and, at times, actively promoted corporate interests over those of consumers,” the consumer advocacy group says, adding that Kraninger “is expected to continue the void in protections at the consumer bureau.”

“Kathy Kraninger has no consumer protection or financial regulation experience. We expect her to simply follow Mick Mulvaney’s playbook,” says Ethan Lutz, U.S. PIRG’s consumer fellow. “While the CFPB’s current leadership has abandoned its mission, we’re grateful that several states are taking action to make sure companies don’t take advantage of consumers.”

The report, “Positioned to Protect: How State and Local Authorities Can Fill the CFPB Void,” highlights the following:

  • Several states (notably New Jersey, Pennsylvania, and Virginia) have added resources to their state Attorney General Offices or established “mini-CFPBs.” Maryland established its own Financial Consumer Protection Commission to provide policy recommendations to its state legislature and attorney general.
  • State authorities, unilaterally, have protected their constituents and prosecuted acts that run afoul of federal “unfair, deceptive, or abusive acts and practices (UDAP)” statutes.
  • States (including California, Connecticut, Illinois, and Washington) and the District of Columbia have enacted student loan servicer regulations and established student loan ombudsman positions.

Karl Frisch, executive director of Allied Progress, a consumer watchdog, said that Kraninger “has repeatedly refused to answer even the most basic questions about her record or her views on pressing consumer financial issues.”

“Why did Republican Senators prioritize Kathy Kraninger’s confirmation during this lame-duck session of Congress when there are still so many unanswered questions about her qualifications and record? Political payback, plain and simple,” he said. “These Senators have taken millions in campaign cash from the very industries regulated by the CFPB, and they trust Kraninger’s commitment to continue Mick Mulvaney’s anti-consumer agenda. More than anything, they do not want someone leading the CFPB who will aggressively protect the interests of consumers from the likes of Wells Fargo, Equifax, payday lenders, and other financial bad actors.”

In the months since Kraninger’s nomination, Allied Progress urged senators to oppose confirmation by launching KathyKraninger.com, running television and digital ads, buying a full-page ad in The New York Times, and launching a direct mail campaign.

As for the CFPB’s newly confirmed director herself, Kraninger provided at least some insight into how she plans to run the agency during a July hearing before the Senate Banking Committee.

“Congress established the [CFPB] ‘to ensure all consumers have access to markets for consumer financial products and services … that are fair, transparent, and competitive.’ I am firmly committed to satisfying this Congressional mandate.”

Kraninger outlined her “four initial priorities.”

“The Bureau should be fair and transparent, ensuring its actions empower consumers to make good choices and provide certainty for market participants,” she said. In particular, “it should make robust use of cost benefit analysis, as required by Congress, to facilitate competition and provide clear rules of the road.”

“In my experience, effective use of notice and comment rulemaking is essential for ensuring the proper balancing of all interests,” she said. “It also enables consideration of tailoring to reduce the burden of compliance, particularly on consumers and smaller marketplace participants.”

The Bureau should also work closely with other financial regulators and states on supervision and enforcement.

“Nothing is more destructive to competitive markets and consumer choice than fraudulent behavior,” Kraninger said. “Under my stewardship, the Bureau will take aggressive action against bad actors who break the rules by engaging in fraud and other illegal activity.”

The Bureau, in Kraninger’s view, “must recognize its profound duty to the American people to protect sensitive information in its possession.” Under her leadership, the Bureau would limit data collection to what is needed and required under law and ensure that data is protected.

“This issue clearly needs more attention, particularly because many consumers are unaware of the vulnerabilities or unsure of what actions to take to protect themselves,” she said.

In summary, the Bureau must also “be accountable to the American people for its actions, including its expenditure of resources,” she said.

U.S. Sen. Sherrod Brown (D-Ohio), ranking member of the Senate Banking Committee, argued during a speech on the Senate floor that Kraninger “will continue to be a rubber stamp for this Administration’s anti-consumer agenda.”

“Our job in this body, in public service, is to fight for the people we serve,” he told his Senate colleagues. “If you’re taking a government salary, your job is to fight for the people who make this country work. Wall Street, the big banks, and corporate special interests all have armies of lobbyists at their beck and call. Our job is to fight for ordinary Americans.”

“The people in this town may have collective amnesia; they may have forgotten the financial crisis and the housing crisis,” he added. “But families who lost their homes and their retirement savings and their college funds haven’t forgotten … Over the last year, Mick Mulvaney has turned an agency meant to stand on the side of the American people into yet another outlet for the financial industry to push its agenda. [He] has said to workers and servicemembers, students and seniors: ‘you’re on your own now; don’t expect any protection from us.’ ”

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