Senate panel approves Trump's nominee for consumer watchdog

The Senate Banking Committee approved Kathy Kraninger as director of the CFPB. (AP)

The Senate Banking Committee on Thursday approved Kathy Kraninger as director of the Consumer Financial Protection Bureau, as Republicans overlooked the protests of Democrats who said President Donald Trump's nominee is unqualified to lead the consumer watchdog.

Kraninger's nomination received approval in a 13-12 party-line vote. The nomination now goes to the full Senate for a vote, where Senate Democrats like Elizabeth Warren, arguably Kraninger's biggest critic, has vowed to block her nomination.

Kraninger, currently a mid-level executive in the Office of Management and Budget, was an unknown before Trump's nomination. She works directly under Mick Mulvaney, who is both Trump's budget director and has been acting director of the CFPB since late November.

Mulvaney has moved to roll back many of the rules and regulations established by the CFPB, which was formed in the wake of the financial crisis. Kraninger has given little guidance on how she plans to run the bureau, but she's expected to operate the bureau similarly to Mulvaney. She has never worked in financial services.

"Will Kathy Kraninger stand up against powerful special interests and fight for service members, students and seniors that need a champion? Unfortunately, the answer is no," said Senator Catherine Cortez-Masto, D-Nevada.

Democrats tried to derail Kraninger's nomination by focusing on her work in the White House's budget office, where she handled the budgets for the Department of Homeland Security and several other large agencies. DHS is the department in charge of the policy to separate children from their parents at the border and the disaster recovery from Hurricane Maria in Puerto Rico, where thousands of Puerto Ricans died and many parts of the island went without electricity for months.

Kraninger dodged many questions regarding these two issues during her nomination hearing last month, and her written responses to Senators' questions were equally evasive.

"She's refusing to describe her role in two very public management failures because she knows it would destroy the case for her nomination," Senator Warren said before the committee's vote.

Republicans argued that Kraninger, as a mid-level bureaucrat, had little to do with those policy decisions and she should be instead judged on her ability as a manager.

The CFPB has been a source of political controversy since its creation. Republicans see the CFPB has an unaccountable federal agency that has too much independence and power and should be reined in, while Democrats say consumers need an agency that stands up to big banks and payday lenders and it must be independent in order to make tough decisions.

"The Bureau of Consumer Financial Protection was the most polarizing part of Dodd-Frank and it is not surprising that the confirmation votes of Richard Cordray and now Kathy Kraninger are contentious," said Senator Mike Crapo, chairman of the Senate Banking Committee.

If Kraninger is approved by the full Senate, she will serve a five-year term as CFPB director.

A far-less contentious nomination was Trump's choice to be president of the Export-Import Bank, Kimberly Reed. Her nomination received unanimous approval from the committee.