Sen. Tina Smith (D-Minn.) pressed President Trump’s nominee to lead the Consumer Financial Protection Bureau (CFPB) over who will be making key decisions at the agency Thursday, after it dismissed several lawsuits against financial firms while he appeared before Congress.
Trump nominated Jonathan McKernan, a former board member of the Federal Deposit Insurance Corporation (FDIC), as CFPB director earlier this month.
McKernan’s nomination comes at tumultuous time for the consumer watchdog, after CFPB acting Director Russell Vought shut down the agency’s work, laid off about a hundred employees and closed its headquarters.
“When we spoke yesterday, I asked about the many lawsuits that are pending before the CFPB and what you thought would happen to them, and you assured me you would review these lawsuits,” Smith said to McKernan when he appeared before the Senate Banking Committee.
“During this hearing, I guess Elon Musk or Russell Vought, or whoever is in charge, is saying that they’re going to drop these lawsuits. How do you respond to this?” she continued.
The CFPB on Thursday voluntarily dismissed four enforcement lawsuits against Capital One, Rocket Homes Real Estate, Pennsylvania Higher Education Assistance Agency and Vanderbilt Mortgage and Finance.
The consumer watchdog sued Capital One in January, accusing the banking giant of “cheating” consumers out of $2 billion in interest on savings accounts by keeping them “in the dark” about better-paying options.
“I mean, this makes me question, who’s really going to be in charge of the CFPB, if this is what’s happening while your nomination is being considered,” Smith said.
“Senator, if I’m confirmed, I’m the director,” McKernan responded.
However, the Minnesota Democrat still appeared skeptical.
“Well, it’s not clear to me, because at the moment that we’re sitting here talking about you taking on this responsibility, Russell Vought or others are dismissing lawsuits you just told me you were going to have the opportunity review before they were dismissed,” she added.
The Trump administration’s actions at the CFPB have sparked concerns among staff and outside observers that officials seek to effectively dismantle the agency, which has long been opposed by conservatives.
However, in a court filing Monday, Justice Department lawyers denied that they plan to eliminate the consumer watchdog, pointing to Trump’s decision to nominate McKernan and Vought’s intention to “run a substantially more streamline and efficient bureau.”
“The predicate to running a ‘more streamlined and efficient bureau’ is that there will continue to be a CFPB,” they wrote.
