We expect the U.S. Senate to confirm, as soon as this afternoon, President Trump’s nominee to lead the CFPB as its Director, Kathy Kraninger. A positive, though razor-thin and highly contested, outcome for Kraninger appears inevitable based on the Senate’s vote just a few days ago, strictly along party lines, to invoke “cloture” on the nomination by a margin of 50-49 (with one Republican absent), thereby prohibiting a Democratic filibuster on the confirmation. If Kraninger is not confirmed today to be the next CFPB Director, we expect confirmation to occur at least by December 21, when the current Senate session will end.
Kraninger has served in the Trump administration at the Office of Management and Budget under Mick Mulvaney, who of course has also occupied the position of Acting Director at the CFPB for the past year. She has been promoted by supporters as a highly competent government manager, but has had very little experience in consumer financial services. The extent to which she will deviate from how Mulvaney has directed the Bureau is yet to be determined but will be closely watched.
Once confirmed by the Senate, Kraninger’s term as Director would be for 5 years if she serves out the full term. This could create conflict down the line, in the event that President Trump is not re-elected. In that case, unless Kraninger resigns voluntarily (as presidential appointees at some other independent agencies have done on occasion when a new President is elected), the new President would only be able to remove her “for cause.”
While numerous litigants have challenged the constitutionality of this “for cause” limitation on the President’s authority to remove the Director, no final appellate decision has endorsed that view to date. (See our prior post, here.) However, briefing recently closed on the issue in a case now before the U.S. Court of Appeals for the Fifth Circuit, so a new decision may be near.