Kathy Kraninger, the new director of the Consumer Financial Protection Bureau, faced criticism Thursday at House Democrats’ first oversight hearing for the financial watchdog agency for her lack of experience in financial policy.
But Democrats directed much of their fire at her predecessor and former boss, current White House acting Chief of Staff Mick Mulvaney, whose deregulation at the agency they dislike and have tried to reverse legislatively.
At the beginning of the hearing, House Financial Services Chairwoman Maxine Waters, D-Calif., said Mulvaney declined a request to testify on his tenure acting as the head of the agency before the Senate confirmed Kraninger as a permanent director.
Kraninger faced pointed questions as she sought to reassure Democrats that she did not want to defang the agency and Republicans that she did not want to push the limits of its authority to police financial markets.
Democrats pressed Kraninger, who has been on the job for less than three months, over her relationship with Mulvaney and President Trump and whether either have directed her current decisions or actions.
“No, Director Mulvaney was not part of the [nomination] process,” said Kraninger, when asked whether her former boss played a role in her selection. Kraninger worked for Mulvaney at the Office of Management and Budget, but said she’d only seen him “socially” since she became director.
[Opinion: Kathy Kraninger will reform the CFPB and bring consumers relief]
Kraninger declined to commit to undoing some of Mulvaney’s actions, like reorganizing an office responsible for oversight of fair lending, shuttering of an online, public consumer complaint database, and leaving unfilled the bureau’s position for a student loan representative for the public.
The variety of questions Kraninger faced included a pop quiz from one member, Rep. Katie Porter, D-Calif., on annual percentage rates, the benchmark for loan cost disclosures in lending.
Kraninger, a former staffer at OMB who spent much of her career in homeland security policy, gave a simplified definition of the rate.
“The APR is an extrapolation if it were a one-year term of the loan,” she said.
Porter then began reading a definition from a textbook on consumer finance law that she wrote before entering Congress, though she did not say what, if anything, Kraninger got wrong.
“I’ll be happy to send you a copy of the textbook that I wrote,” said Porter, holding up the book, before asking Kraninger to calculate APR on a theoretical loan. “My concern is whether you know well, ma’am, because you are the one responsible for making sure that American consumers know well when they take on loans.”
Kraninger responded: “This is not a math exercise though, it is a policy conversation about what the implications are.”
