Consumer protection is critical, but too often the Consumer Financial Protection Bureau has “gotten in the way of its own mission,” former FDIC Director Jonathan McKernan said today during a Senate hearing on his nomination to lead the CFPB.
The Senate Banking Committee held a hearing to consider President Trump’s nomination of McKernan along with the nominations of Jeffrey Kessler to be undersecretary of commerce for Industry and Security at the Department of Commerce, William Pulte to be director at the Federal Housing Finance Agency, and Stephen Miran to be chairman of the Council of Economic Advisors. In his testimony, McKernan criticized the CFPB for too often acting in a politicized manner.
“It has pushed beyond the limits of its statutory authority,” he said. “It has seized opportunities to expand its jurisdiction and power. It has offended our basic notions of fairness and due process when it has regulated by enforcement. And it has harmed consumers through higher prices and reduced choice when it has failed to strike an appropriate balance between costs and benefits in prescribing new regulations”
McKernan said that if confirmed as CFPB director, the bureau will enforce federal consumer financial laws and perform its other statutorily assigned functions. “But the CFPB will do this by centering its regulation on real risks to consumers and by focusing its enforcement on bad actors,” he added.
Earlier this month, Acting CFPB Director Russ Vought ordered bureau staff to cease all activities and closed the agency’s headquarters in Washington, D.C. President Trump and Elon Musk — who is leading the administration’s efforts to cut the size of government — have both suggested they want to eliminate the bureau.
Committee Ranking Member Elizabeth Warren (D-Mass.), who was a chief architect behind the creation of the CFPB, questioned whether the administration’s actions made McKernan “the number one horse at the glue factory.” When pressed by Warren, McKernan said he was not aware of the specifics of the current situation at the CFPB, but his intent is to have the bureau enforce the law.
“The moral of the story here is you got to follow the law [and] fully and faithfully execute the statute,” he said. “I take that very seriously as a former congressional staffer. I’m an Article I guy. I’m going to make sure the CFPB performs each of its statutorily assigned functions.”
