U.S. Senate Holds Hearing on CFPB and Ex-Im Bank Nominees

On 19 July 2018, the Senate Committee on Banking, Housing and Urban Affairs held a hearing on the pending confirmation of two federal agency nominees.

The first nominee is Ms. Kathleen Laura Kraninger, of Ohio, who has been nominated as the Director of the Consumer Financial Protection Bureau (CFPB). The second is Ms. Kimberly A. Reed, of West Virginia, who has been nominated to be the President of the Export-Import Bank of the United States (EX-IM).

Leading up to the 19 July hearing, Senate Committee Democrats called on Chairman Mike Crapo (R-ID) to postpone the hearing over having not yet received a response to their request to the administration for relevant documents pertaining to Kraninger’s work in her position of Associate Director at the Office of Management and Budget (OMB). The hearing proceeded on the originally scheduled date. The next step in the confirmation process is for the Committee to schedule a vote on the nominations.

Kraninger was well received by Republican members of the Committee and faced criticism from Democrat members. Kraninger specifically faced concerns with her assumed involvement with the Trump Administration’s zero-tolerance immigration policy as well as the disaster relief response to Puerto Rico in her role at OMB. In the hearing, Kraninger pledged to establish four initial priorities for CFPB if confirmed including ensuring fairness of the bureau, working closely with other financial regulators and states on supervision and enforcement, protecting sensitive data, and remaining accountable to the American people. If confirmed, Kraninger would replace acting CFPB Director Mick Mulvaney.

In December 2017, Reed was voted in on a bipartisan basis as First Vice President of EX-IM. Reed maintains that overwhelming support on both sides of the dais for her current nomination for President of EX-IM. In the hearing, Reed promised to hold review to ensure that EX-IM is truly being used as a bank of last resort. Reed announced that she plans to work with Congress and the Administration in order to address China’s biased trade policies. Reed also pledged that she would do all that she can to reduce waste, fraud and abuse within the bank. If confirmed, Reed would replace acting EX-IM President Jeffrey Gerrish.

Reed was well received on a non-partisan basis. Kraninger received some pointed questions and disapproving comments throughout the hearing from the Committee Democrats. Chairman Crapo (R-ID) voiced support for both Reed and Kraninger. The Senate Committee Ranking Member verbally supported Reed’s nomination and believes she is well qualified for the position. Kraninger did not receive such support from Ranking Member Brown (D-OH) who questioned her previous work in her position at OMB and her ability to perform as Director of CFPB.

Related: U.S. CFPB Concludes RESPA Investigation of Zillow Co-Marketing

How This Impacts Mobility

The relocation of a transferee often involves the sale and/or purchase of a home and thus the policies and practices involving real estate directly impact Worldwide ERC® members. The CFPB Director has enormous powers with little oversight from Congress and thus the policy positions of a specific individual as director determines the direction of the Bureau. Under OMB Director Mulvaney, the CFPB has taken the position to enforce consumer protection laws but to not “push the envelope”.

Related: Mulvaney Continues to Shape U.S. CFPB

Export-Import Bank & Mobility

The Export-Import Bank provides loans to foreign purchasers of U.S. goods and services in transactions which would otherwise potentially not receive financing. The transactions can result in the need to relocate employees either to the U.S. or abroad.

President Trump sent the nomination of former Representative Garrett to be the President of the Board of the Export-Import Bank on 19 June 2017. Export-Import Bank nominee, former Representative Scott Garrett, testified on November 1 before the Senate Committee on Banking, Housing and Urban Affairs as part of his confirmation process. As a Congressman, Garrett (R-NJ) had called for the elimination of the Export-Import Bank. When questioned by Senators about his position on the Bank, Garrett stated his reversal in position and reiterated statements he has made since being nominated that he now supports the role of the Bank. President Trump had also made statements during his campaign which indicated he was not supportive of the mission of the Export-Import Bank. However, he made statements in April in conjunction of the nominations of Garrett that he no longer wanted to see the Bank eliminated.

Former Congressman Garrett’s nomination was rejected on 19 December 2017 by the Senate Banking, Housing and Urban Affairs Committee in a 10-13 vote.

The Export-Import Bank provides financing, loan guarantees and insurance to companies for exporting goods and services overseas in situations where financing is otherwise unavailable due to geopolitical or other concerns. The Board of the Bank is comprised of five members.  With three of those seats currently vacant, the Bank has not been able to fund deals worth more than $10 million due to a lack of quorum.