Alan Kaplinsky’s “Fireside Chat” with Kathy Kraninger, Former Director of the CFPB During Trump 1.0

Consumer Finance Monitor

Today’s podcast episode is a repurposing of Alan Kaplinsky’s “fireside chat” with Kathy Kraninger, the Director of the CFPB during the second half of President Trump’s presidency from December 2018 until January 2021. (This was originally the first half of a webinar we did on January 6, 2025 which was entitled “The Impact of the Election on the CFPB - Supervision and Enforcement.” The January 6 webinar is Part 2 of a 3-part series. Next Thursday, we will release the second half of that webinar which will feature Ballard Spahr partners, John Culhane and Mike Kilgariff, who will take a deep dive into the expected changes in CFPB supervision and enforcement during President Trump’s second term in office.)

During her “fireside chat” with Alan, Kathy discussed the following things:

(a) How she was nominated by Trump to be the Director and succeeded Mick Mulvaney, the acting Director appointed by Trump to succeed Richard Cordray as Acting Director;

(b) Organizational and other changes made by Mulvaney and/or Kraninger, including a hiring freeze, appointments of new heads of departments, etc;

(c) The practical impact on CFPB operations of the Supreme Court’s opinion in the Seila Law case in which the Court held that the President had the right to remove the CFPB director without cause;

(d) Her priorities as Director, including her regulatory, supervisory and enforcement agendas;

(e) Her policy statements on “abusiveness”, supervisory expectations and COVID-19;

(g) Her thoughts on what she anticipates will change at the CFPB once a new acting director chosen by Trump succeeds Rohit Chopra; and

(h) Her thoughts on whether Congress should re-structure the CFPB’s governance and funding.

The “fireside chat” provides stakeholders in the CFPB insight into what may happen at the CFPB during Trump 2.0. There will, however, be some important differences between the circumstances that existed during the transition from Cordray to Mulvaney Kraninger during Traump 1.0 and the transition from Chopra to a new acting Director during Trump 2.0.. At the time when Mick Mulvaney became Acting Director, there were no pending lawsuits challenging CFPB final regs and other actions. During Mulvaney’s term in office, a trade association of payday lenders sued the CFPB challenging the CFPB’s payday lending rule and, in particular, its “ability to pay” requirement. The acting director appointed by Trump will inherit multiple pending lawsuits against the CFPB challenging many of the regs issued by the CFPB under Rohit Chopra’s last two years as Director. The Acting Director will need to develop legislative (Congressional Review Act), judicial and regulatory strategies for dealing with the slough of regs, proposed regs and other written guidance issued by Chopra. The Acting Director will also need to quickly decide what position the CFPB will take with respect to the defense raised in at least 13 enforcement lawsuits claiming that the CFPB has been disabled from conducting business since September 2022 when there was no longer any “combined earnings of the Federal Reserve Banks” - a prerequisite to the Federal Reserve Board funding the CFPB under the Dodd-Frank Act.

Alan Kaplinsky, Senior Counsel and former chair for 25 years of the Consumer Financial Services Group, hosts the discussion.