Earlier today Jonathan McKernan, President Trump’s nominee to head the CFPB, pledged that the agency would “implement and enforce the federal consumer financial laws and perform each of its other statutorily assigned functions.”
The comment, made during his confirmation hearing before the Senate Banking Committee, came in stark contrast to the Trump Administration’s previous statements that it intends to take the actions necessary to dismantle the CFPB. That includes canceling the lease at CFPB headquarters, according to Sen. Jack Reed, D-R.I.
McKernan’s comments echo those made in a document the Department of Justice (DOJ) filed on behalf of the CFPB in the National Treasury Employees Union’s lawsuit against the agency. The union has accused the Trump Administration of starting to dismantle the bureau.
However, the DOJ said in its filing that bureau officials recently wrote to the Federal Reserve that the bureau will be run in a streamlined and efficient fashion. “The predicate to running a more streamlined and efficient bureau is that there will continue to be a CFPB,” the DOJ said, in opposing a request for a preliminary injunction blocking agency actions that would appear to dismantle the bureau.
In his testimony, McKernan pledged to follow the requirements of the Dodd Frank Act, which, according to Banking Committee ranking Democrat Sen. Elizabeth Warren, D-Mass., established 88 specific duties for the bureau.
“I’m going to enforce the law,” McKernan said.
However, he added that there are problems at the bureau.
“It’s clear that the CFPB suffers from a crisis of legitimacy,” McKernan told the Banking Committee. “This must be corrected if the CFPB is to reliably do what it’s supposed to do—look out for the American consumer. To that noble end, the CFPB needs to be made accountable to our elected officials and its past excesses need to come to an end.”
In his testimony, McKernan also said the bureau will focus “on real risks to consumers … by focusing its enforcement on bad actors.” The bureau has not always done that, McKernan said, adding that the agency has very little accountability to Congress.
“It has acted in a politicized manner,” he told the committee. “It has pushed beyond the limits of its statutory authority. 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.”
Warren said she remains concerned that the administration intends to shut down, the agency.
“Congress created the CFPB, and no one, not Donald Trump, not co-Presidents Elon Musk and Donald Trump, no one except Congress can shut it down,” she said.