Tag Archives: CFPB

U.S. consumer watchdog director resigns at request of Biden administration

By Michelle Price

WASHINGTON (Reuters) – Kathy Kraninger has resigned effective immediately as director of the U.S. consumer watchdog at the request of President Joe Biden’s administration, she tweeted shortly after Biden was sworn in on Wednesday, paving the way for the new president to quickly install an interim agency head.

Kraninger was appointed by former Republican President Donald Trump to serve a five year term as director of the Consumer Financial Protection Bureau (CFPB) ending in 2023.

Last year, however, the Supreme Court ruled in favor of a challenge, backed by the Trump administration and long-supported by most Republicans, which argued that the CFPB director served at the president’s will.

Biden’s transition team made it clear on Monday that his White House was willing to test that new power if Kraninger did not resign when it announced that he planned to nominate Federal Trade Commission member Rohit Chopra to replace Kraninger.

“I support the Constitutional prerogative of the President to appoint senior officials within the government who support the President’s policy priorities, which ensures our government is responsive to the will of the people,” Kraninger wrote in her resignation letter.

It was unclear whether the White House planned to install Chopra as acting CFPB director pending his Senate confirmation, or whether Kraninger’s deputy or another CFPB staffer would lead the agency in the interim.

The CFPB has been a political lightning rod since it was created following the 2009 financial crisis, beloved by Democrats as a guardian of ordinary Americans but reviled by Republicans as too powerful and unaccountable.

Consumer groups have fiercely criticized Kraninger for defanging the agency by relaxing enforcement and easing rules on payday lending, mortgage lending, and debt collection.

On Wednesday, Kraninger appeared to rebut those criticisms, writing that she had “focused on implementing common-sense solutions to complex problems and delivering real value for the American people.”

(Additional reporting by Pete Schroeder; Editing by Chizu Nomiyama)

The top contenders to run Biden’s financial agencies

By Pete Schroeder, Michelle Price and Katanga Johnson

WASHINGTON (Reuters) – Democratic U.S. President-elect Joe Biden’s team has tapped a mix of progressives and centrist policy experts, including former derivatives market regulator Gary Gensler, to work on a transition plan for financial industry oversight.

Here is how staffing could shake out at some of the key financial regulators, according to nearly two dozen lobbyists, officials and policy experts in Democratic circles.

CONSUMER FINANCIAL PROTECTION BUREAU (CFPB)

The CFPB director is a critical role for progressives such as Senator Elizabeth Warren who believe the agency can help tackle wealth inequality and racial injustice. A June Supreme Court ruling handed Biden the power to fire Republican President Donald Trump’s CFPB director, Kathy Kraninger, and many policy experts expect him to quickly replace her after he takes office on Jan. 20.

Potential candidates for the role include Warren’s protégée, U.S. Representative Katie Porter; Federal Trade Commissioner Rohit Chopra; Bharat Ramamurti, Warren’s former aide who sits on a pandemic congressional oversight panel; and Patrice Ficklin, the CFPB’s fair lending director who has been at the agency since its inception in 2011.

SECURITIES AND EXCHANGE COMMISSION (SEC)

Biden is also expected to quickly staff up the SEC, which under Chair Jay Clayton, a Trump appointee, has pursued many rule changes opposed by Democrats and investor advocates.

Clayton, whose role is based in Washington, has said he wants to return home to New York and is expected to resign well before his term ends in June. That would position senior Democratic SEC Commissioner Allison Lee as acting chair until a new chair is sworn in.

Progressives are keen on former Democratic SEC Commissioner Kara Stein for chair, although Rob Jackson, also a former Democratic commissioner who currently teaches at New York University School of Law, is preferred by moderates. Gensler is also a contender, the sources said.

BANKING REGULATORS

There will be a handful of banking regulator roles to fill, with the first likely to be comptroller of the currency. That is because current Comptroller Brian Brooks is serving in an acting capacity, allowing Biden to replace him quickly. Amy Friend, formerly senior deputy comptroller and chief counsel at the agency under Obama, is seen as a leading candidate.

Federal Deposit Insurance Corporation (FDIC) Chair Jelena McWilliams cannot be removed by Biden and has said she wants to serve out her term, which ends in 2023. But Biden can still tilt the agency’s five-seat board, which passes rules via majority vote, by quickly appointing the heads of the CFPB and Office of the Comptroller of the Currency who always hold seats on the FDIC board too. Obama-era holdover and former FDIC Chair Martin Gruenberg already has a seat.

If McWilliams resigns, Michael Barr, professor at the University of Michigan Law School and former Obama administration Treasury official is seen as a contender for that or another banking slot, as is Graham Steele, a director at the Stanford Graduate School of Business and former Federal Reserve staffer. Barr is advising the transition team.

COMMODITY FUTURES TRADING COMMISSION (CFTC)

Current Republican CFTC Chair Heath Tarbert is expected to resign from the chairman’s role, putting senior Democratic Commissioner Rostin Behnam in line for acting chair. But the sources said Dan Berkovitz, the other Democratic CFTC commissioner and formerly general counsel to Gensler when he led the agency, is the front-runner for the permanent chairman’s role.

FEDERAL HOUSING FINANCE AGENCY (FHFA)

The FHFA is led by libertarian Mark Calabria who has said he is committed to overhauling the country’s housing finance market before his term ends in 2024. He is unlikely to resign, the sources said, and cannot currently be fired. That could change, however, pending a Supreme Court challenge to the agency’s structure, which could find the director can be removed.

If so, Biden, for whom affordable housing is a key policy, is likely to replace him. Potential contenders for his job include Eric Stein, who was special adviser to Democratic FHFA Director Mel Watt from 2014 to 2019, and Diane Yentel, chief executive of the National Low Income Housing Coalition. Stein is also advising the transition team.

All those named above, or their representatives, declined to comment or did not respond to requests for comment, other than Ficklin and Clayton. While Ficklin would not comment on whether she was in contention for a role, she said she would be honored to serve. A spokeswoman for Clayton said there are a number of items on his agenda “that he intends to move forward in the upcoming months.”

(Reporting by Michelle Price, Pete Schroeder and Katanga Johnson; Editing by Peter Cooney and Alistair Bell)