Trump's pick to lead financial regulator wins Senate approval

WASHINGTON -- Nearly two years into his administration, President Donald Trump will finally have his own permanent nominee running the Bureau of Consumer Financial Protection, a controversial agency that Republicans say has stifled economic growth by burdening banks with red tape.

The Senate voted 50-to-49 Thursday to confirm Kathy Kraninger, a little-known Office and Management Budget official, as the consumer watchdog’s permanent director. She will succeed her boss, White House Budget Director Mick Mulvaney, who has been leading the CFPB part-time for more than a year.

No Democrats voted in favor of Kraninger’s confirmation.

Kraninger will take over an agency created by the 2010 Dodd-Frank Act that regulates everything from credit cards to mortgages. The agency, also known as the CFPB, has been a political football throughout its existence, with Democrats regularly praising it as the crown jewel of post-crisis reforms and Republicans -- and auto dealers -- arguing that it’s a stark example of government overreach.

The bureau’s oversight of the auto industry has narrowed in recent months. In a victory for dealers, Trump in May signed into law a congressional resolution overhauling a bulletin issued by the bureau.

The controversial 2013 bulletin aimed to limit dealerships' retail margins on auto loans, which the bureau said may have led to minority borrowers being charged more on loans. It suggested indirect auto lenders either limit dealer reserve -- the retail margin dealerships earn for arranging a loan -- eliminate dealer discretion on the margin altogether or compensate dealers with a flat fee.

The bureau suggested with the bulletin that variances in dealerships' discretion caused minorities to be charged higher interest rates than their nonminority counterparts with similar credit, even if no discrimination was intended.

Following Mulvaney's lead

As director, Kraninger is widely expected to follow Mulvaney’s lead in softening the CFPB’s bite by re-examining rules and pursuing fewer enforcement actions than it did during Barack Obama’s presidency. Still, she may work more quietly than Mulvaney, who has seemed to relish bickering with the CFPB’s defenders, including Democratic Senator Elizabeth Warren.

Kraninger is likely to face tougher congressional oversight than Mulvaney did. That’s because Democrats will take control of the House in January. Representative Maxine Waters, the California lawmaker in line to lead the House Financial Services Committee, has pledged to hold the CFPB’s Trump-appointed leadership accountable for efforts to weaken the agency.

Reuters and Automotive News contributed to this report.