CFPB Nomination Hearing
This morning, the Senate Banking Committee is holding a nomination hearing. Amongst others, the hearing is for the director designee of the Consumer Financial Protection Bureau, Jonathan McKernan. Mr. McKernan, who previously served at the Federal Deposit Insurance Corporation (FDIC), laid out his approach to the running the CFPB in his written testimony, saying:
“All too often, however, the CFPB has gotten in the way of its own mission. It has acted in a politicized manner. 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.
Even if you don’t agree with that view, it’s clear that the CFPB suffers from a crisis of legitimacy. 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.
Under my watch, the CFPB will take all steps necessary to implement and enforce the federal consumer financial laws and perform each of 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.”
During the hearing, Republican senators asked several questions of Mr. McKernan to emphasize how the CFPB will operate differently under his tenure, if confirmed. Mr. McKernan stated that the CFPB has previously exceeded its authority and was asked specifically about the harms of rulemaking by enforcement.
Ahead of the hearing, Ranking Member Elizabeth Warren (D-MA) sent a letter to Mr. McKernan outlining her concerns about “illegal efforts to dismantle the CFPB”, “supervision, enforcement, and rulemaking authorities”, and several specific groups of American consumers including servicemembers. The sixteen-page letter contained fifty-five questions for the nominee to answer. On Tuesday, Senator Warren organized a “forum” hearing to underscore the positive influence the CFPB has on Americans’ financial lives. During the “forum”, she vowed to fight the administration in court.
During Senator Warren’s round of questions, she was able to ask thirteen questions in five minutes. In response to her line of questioning, Mr. McKernan committed to following the law and performing the statutory authorities assigned to the CFPB.
February 27th, 2025
