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The Senate Committee on Banking, Housing and Urban Affairs on Thursday held a marathon single confirmation hearing for a total of four Trump administration nominees, two of which have significant potential for impacting the housing market and its regulatory oversight.
One of the nominees appearing before the committee was Jonathan McKernan, Trump’s choice for director of the Consumer Financial Protection Bureau (CFPB).
Right out of the gate, committee ranking member Elizabeth Warren (D-Mass.) castigated committee leadership for assessing four nominees in a single hearing. Warren told committee chairman Tim Scott (R-S.C.) that lawmakers would be limited to roughly 75 seconds of questioning for each nominee. But this didn’t prevent senators from primarily focusing their lines of questioning to McKernan.
Multiple Democratic lawmakers pressed the nominee on what his role would be in the leadership of an agency targeted by prominent members of the Trump administration. Republicans, meanwhile, asked primarily about what McKernan views as the role of a bureau that they believe has overstepped its statutory authority during Democratic administrations.
Warren told McKernan that she is not sure what his role will look like after the actions taken by the administration to scale back the bureau’s activities.
“Mr. McKernan, you’ve been nominated to run this agency where Elon Musk has told everyone to do nothing. It kind of feels like you’ve been lined up to be the No. 1 horse at the glue factory,” Warren said.
McKernan volleyed with Warren and said that his primary duty will be to focus the CFPB on its statutory responsibilities as laid out in the Dodd-Frank Act, the law that brought the bureau into existence.
“As [CFPB] director, you are tasked with some very specific statutory responsibilities,” McKernan said. “Those are mandatory, not optional.”
Warren turned her attention to actions taken by Russell Vought, the director of the White House Office of Management and Budget (OMB), in his capacity as acting CFPB director. Vought ordered the closure of the CPFB’s Washington, D.C., office and to keep its employees off the premises.
McKernan said he didn’t agree with the premise suggesting these employees have been “told to do nothing,” but Warren said it was a matter without nuance.
“All 1,700 employees have been locked out of the building and told to do nothing, and if they hear that another employee is doing something, to report them,” she said.
While saying he didn’t understand the specifics of her question, McKernan said he was “fairly certain there are exceptions” to these actions and again vowed to follow the statutory requirements as laid out in the law.
“The North Star here is you’ve got to follow the law, and fully and faithfully execute the statute,” he said. “I take that very seriously. As a former congressional staffer, I’m an article one guy. I’m going to make sure the CFPB performs each of its statutorily performed [duties].”
Sen. Mike Rounds (R-S.D.) asked McKernan if he believes that the CFPB has operated outside of its statutory authority, to which McKernan agreed.
“There have been, all too often, cases in which the CFPB has acted beyond the statutory authority,” he said. “You don’t have to take my word for it. You can ask the courts.”
Rounds asked McKernan what his day one priority would be if confirmed to lead the bureau. McKernan responded by saying he wanted to “refocus” on its core mission.
“We need to research, rightsize it, to make sure that we have an efficient CFPB, and we need to reinstate some accountability to our elected officials,” he said. “A big part of the CFPB’s problem is it has very little accountability, either to Congress or to the president. I think that’s part of the reason we’ve had these recurring episodes of CFPB pushing the limits.”
Sen. Thom Tillis (R-N.C.) used his time to ask about McKernan’s qualifications, also asking if he believed the CFPB to be a prudent regulator. McKernan responded that he did not.
