The Senate Banking Committee convened this morning for a nomination hearing, which included the consideration of Jonathan McKernan as the director designee of the Consumer Financial Protection Bureau (CFPB). McKernan, who has previously served at the Federal Deposit Insurance Corporation (FDIC), presented his vision for leading the CFPB in his written testimony.
McKernan expressed concerns about the current state of the CFPB, stating: "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."
He emphasized that even if there is disagreement with this view, "it’s clear that the CFPB suffers from a crisis of legitimacy." He argued that this issue must be addressed for the bureau to effectively protect American consumers. McKernan pledged that under his leadership, "the CFPB will take all steps necessary to implement and enforce federal consumer financial laws" while focusing on real risks to consumers and targeting bad actors.
Republican senators questioned McKernan during the hearing about how he would ensure different operations at the CFPB under his potential leadership. He acknowledged past overreach by the bureau and discussed concerns regarding rulemaking by enforcement.
Prior to today's hearing, Senator Elizabeth Warren (D-MA), Ranking Member, sent a letter to McKernan outlining her worries about "illegal efforts to dismantle the CFPB," along with issues related to supervision, enforcement, rulemaking authorities, and specific consumer groups like servicemembers. The letter contained fifty-five questions for McKernan's response.
Senator Warren also organized a forum earlier in which she highlighted positive impacts of the CFPB on Americans' financial well-being and promised legal action against any attempts by the administration that she views as detrimental.
During her questioning period at today's hearing, Senator Warren asked thirteen questions within five minutes. In response, McKernan assured adherence to legal obligations and fulfillment of statutory duties assigned to him should he be confirmed as director.