Kraninger Attempting to Keep Imprint on CFPB Even if She Is Fired

For someone who might be out of a job soon, CFPB Director Kathleen Kraninger has been extremely busy during the past week, appointing five members of her executive team and releasing a new advisory opinion policy — moves that an advocate said may undermine the agency’s mission in a new administration.

“Kathy Kraninger is a dedicated, even if amiable, opponent of the CFPB’s mission,” Jeff Hauser, executive director of the Revolving Door Project, which monitors presidential transitions, said. “These last second decisions will require significant scrutiny by her successor on January 20th, 2021 — and Kraninger’s termination and that scrutiny should not begin even a day later than Inauguration.”

The incoming Biden Administration is expected to drastically shift CFPB policy and enforcement — returning the agency to the strict regulatory regime that was in operation during the Obama Administration. The transition team assigned to the agency by Biden is filled with people who favor a strong CFPB.

The agency, under President Trump, has been much more pro-business, advocates said.

And Hauser said the current administration is trying to maintain its influence even after President-elect Biden takes office.

“The Trump team is committed to leaving the government as corporate-friendly as possible when Biden takes it over,” Hauser said.

Kraninger, on Tuesday, announced five appointments:

• Matthew Bettenhausen as senior advisor and counselor to the director.
• Chris Chilbert as chief information officer in the bureau’s operations division.
• Janis K. Pappalardoas associate director for research, markets and regulation.
• Donna Royhas as COO.
• Deborah Royster as assistant director for older Americans.

The CFPB also made a major policy move this week — finalizing its new Advisory Opinions Policy plan that the agency said will provide some level of certainty to the regulatory process. Under the policy, entities can submit a request to the bureau about the agency’s interpretation of regulations and how they might apply to the applicant.

“Regulatory certainty promotes compliance if the law applies and avoids unnecessary compliance costs if the law does not,” the CFPB said in releasing the new policy. Consumer groups have said the advisory opinion policy will allow the agency and others to circumvent the regulatory process.

It is not clear whether any of the five new appointees will be protected under federal civil service rules.

An organization that monitors presidential transitions said that it is not unusual for outgoing administrations to try to “burrow in” employees.

“During election seasons, the status of political appointees in the federal workforce come under increased scrutiny,” the Partnership for Public Service’s Center for Presidential Transition said in a recent study. “Under all recent presidents, some political appointees have attempted to become civil servants — a process commonly called ‘burrowing in.’”

“These kinds of conversions inevitably create concerns,” the center said. “Supporters of an incoming president may be suspicious of individuals hired by the previous administration. “