In a heated Senate session, President Donald Trump's nominee for the Consumer Financial Protection Bureau (CFPB), Jonathan McKernan, faced rigorous questioning from Democratic senators. McKernan, a former board member of the Federal Deposit Insurance Corporation, was nominated to lead the CFPB amidst allegations that the agency has "acted in a politicized manner" and exceeded its legal authority, according to his own observations. The agency has been accused of inadvertently raising consumer prices and suffering from a "crisis of legitimacy."
The CFPB, under acting Director Russell Vought, has seen significant structural changes. Vought shuttered the Washington headquarters, fired approximately 200 employees, and instructed remaining staff to halt nearly all work. This upheaval sparked further concerns about the agency's future, with Sen. Jack Reed, D.-R.I., expressing fears that the CFPB is facing extinction. An allegation from a CFPB union suggests Vought intends to terminate over 95% of the agency's staff.
"You're going to be placed in a very difficult position," Reed remarked during the session. "You do not appear to have much presidential support or OMB support, and I have this sinking feeling that you're departing Liverpool on the Titanic. Good luck."
McKernan assured senators that he plans to "right-size" the CFPB, aiming to "refocus it" and "make it accountable." He pledged to "fully and faithfully" enforce laws related to the agency's mission. McKernan also acknowledged the statutory requirements brought up by Sen. Elizabeth Warren, including maintaining advocacy offices for military veterans and senior citizens and ensuring a website and toll-free line for consumer complaints remain operational.
"It kind of feels like you've been lined up to be the No. 1 horse at the glue factory," Warren remarked, pressing McKernan on his commitment to uphold these requirements.
Amidst these discussions, it was revealed that the CFPB has dismissed at least four enforcement lawsuits, which included actions against Capital One and a Berkshire Hathaway unit. The cancellation of the CFPB's lease on its headquarters and the dismissal of cases against "predatory lenders" further fueled controversy.
"This must be corrected if the CFPB is to reliably do what it's supposed to do: look out for the American consumer," McKernan emphasized.
In response to the ongoing challenges, McKernan reiterated his commitment to addressing these issues head-on and expressed his intention to restore confidence in the agency.