The Senate today confirmed Kathleen Kraninger as CFPB Director by a party-line, 50-49 vote, with Sen. Tillis abstaining. Kraninger will replace current Acting Director Mick Mulvaney, who also currently oversees Kraninger at the Office of Management Budget (OMB) where she is associate director of general government and Mulvaney is Director. Kraninger is expected to continue deregulatory initiatives launched during Mulvaney’s tenure as Acting Director at the CFPB.
Kraninger is set to serve a five-year term pursuant to the Dodd-Frank Act. However, current litigation challenging the constitutionality of the CFPB’s structure raises questions as to whether Kraninger will ultimately serve the full five-year term, particularly if a Democratic president is elected in 2020. As we previously discussed here, the D.C. Circuit initially ruled that the CFPB was unconstitutionally structured because its single director can only be removed for “inefficiency, neglect of duty, or malfeasance in office,” but subsequently reversed the holding in an en banc decision. The constitutionality of the CFPB’s structure is also being challenged in the Second and Fifth Circuits – increasing the likelihood that the Supreme Court will take up the issue at some point soon.