White House

Trump CFPB pick would be first director of consumer agency with student debt

By Ben Wieder

July 25, 2018 12:14 PM

WASHINGTON

While President Donald Trump’s nominee to head the Consumer Financial Protection Bureau has drawn criticism from consumer advocates and Democrats for her lack of relevant experience, she has first-hand experience with at least one area under the bureau’s mandate: student loans.

Kathleen Kraninger, currently with the federal Office of Management and Budget, holds between $50,000 and $100,000 in student debt, according to her financial disclosure records. She took the debt on in 2003, the year she entered Georgetown law school, according to her biography on LinkedIn. Neither the CFPB’s acting director, Mick Mulvaney, nor its previous director, Richard Cordray, held student loans when they assumed leadership of the agency, according to their financial disclosures.

That first-hand experience didn’t come up in her confirmation hearing last week in the Senate Banking Committee, despite the fact that she was asked by multiple Democrats what she would do to protect student borrowers.

Under Mulvaney, the Bureau’s student lending unit was consolidated into the consumer information division.

When asked about that change by Sen. Chris Van Hollen, D-Maryland, Kraninger said she would reconsider it, but was non-committal beyond that.

“I will absolutely review the structure of the organization and I will certainly consider that with an open mind,” she said.

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Her answers – and her status as a student debt-holder – hasn’t won over consumer advocacy groups

“While Ms. Kraninger’s own status as one of 44 million Americans with outstanding student loan debt provides her with some insight, this is but a drop compared to a tidal wave of evidence weighing against her nomination,” said Ashley Harrington, counsel at the Center for Responsible Lending. “Student borrowers need a director who will be their champion – she is not that person.”

Kraninger has spent much of her career in the federal government working for the Department of Homeland Security and the U.S. House and Senate Appropriations Committees before her current role at OMB.

Senate Banking Committee Chairman Mike Crapo, R-Idaho, pointed to this experience in touting her nominations.

“Given her depth and diversity of public service experience, I have the utmost confidence that she is well-prepared to lead the bureau in enforcing federal consumer financial laws and protecting consumers in the financial marketplace,” Crapo said in his opening remarks at last week’s hearing.

Democrats also turned to her prior government work – to tie her to controversial programs enacted by the Trump administration.

Sen. Elizabeth Warren, D-Massachusetts, considered the architect of the CFPB, released a blistering report ahead of Kraninger’s confirmation hearing, linking Kraninger to the Trump administration’s separation of immigrant families at the border and the response to Hurricane Maria in Puerto Rico.

Those policies were among the subjects she was quizzed on by Democratic senators in the testy confirmation hearing, though she appears to be on track to secure confirmation.

Mulvaney – who is also Kraninger’s boss at OMB — set out to transform the CFPB when he took over earlier this year, seeking to rein in what he described as its previous tendency to “push the envelope” under the agency’s former director Richard Cordray, who had been appointed by President Barack Obama. Under Mulvaney, the agency dropped a lawsuit in February against a payday lender and backed a lawsuit by payday lenders seeking to block federal payday lending rules developed by the CFPB on Cordray’s watch.

The student lending market has grown to more than $1 trillion in outstanding debt. By using data and expert interviews, the Consumer Financial Protection Bureau gives context to consumers considering taking on student loans.

By CFPB

Ben Wieder, 202-383-6125, @benbwieder