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Senate confirms protege of industry-friendly Mick Mulvaney to head Consumer Financial Protection Bureau

Jim Puzzanghera, Los Angeles Times on

Published in Business News

WASHINGTON -- The Senate, in a party-line vote Thursday, confirmed White House aide Kathy Kraninger to head the Consumer Financial Protection Bureau and experts predicted a continuation of the industry-friendly shift it has taken since President Trump installed an acting director last year.

Kraninger is a protege of acting director and White House budget chief Mick Mulvaney, an outspoken critic of the agency that was created in the aftermath of the 2008 financial crisis to prevent predatory lending and other abuses that led to it.

Democrats and consumer advocates have denounced him for sharply departing from the aggressive watchdog role the bureau had pursued under its first director, Obama-appointee Richard Cordray, including scaling back enforcement and moving to reassess tough new rules on payday loans and narrow the definition of abusive practices by banks and other firms.

Kraninger is expected to continue those initiatives. But she will face tougher oversight than Mulvaney, a former Republican congressman, as Democrats take control of the House next year.

"I think she'll largely manage the CFPB in the same way Mulvaney has, meaning that there will be less of an emphasis on enforcement," said Alan S. Kaplinsky, head of the consumer financial services group at law firm Ballard Spahr. "I don't think there will be a lot of new regulations that are going to be proffered."

Those expectations led to support for Kraninger's nomination from banks and other financial firms, some of which could be emboldened by her confirmation to a five-year term.

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"I think there will be some in the industry that will feel empowered to push the envelope," said Ed Mills, a Washington policy analyst at brokerage Raymond James Financial Inc.

That's what Senate Democrats fear. None voted to confirm her as director of the powerful, independent agency. The final was tally was 50-49, with only Republicans supporting the nomination.

Kraninger, 43, has been a deputy of Mulvaney's in his other position as director of the White House Office of Management and Budget. She told senators at her confirmation hearing this summer that Mulvaney was doing a good job at the CFPB, and in written responses to questions later that she couldn't point to any actions he'd taken with which she disagreed.

Those responses and Kraninger's lack of any consumer finance experience -- her background is mostly in homeland security -- infuriated Democrats.

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