Sen. Tina Smith (D-Minn.) pressed President Trump's candidate to lead the Consumer Financial Protection Bureau (CFPB) on Thursday on who will make key decisions at the institution after dismissing several lawsuits against the financial company while appearing before Congress.
Trump appointed Jonathan McCernan, a former board member of the Federal Deposit Insurance Corporation (FDIC) as CFPB director earlier this month.
McKernan's appointment comes at a tumultuous time for consumer watchdogs after CFPB's acting director Russell Vought shut down agency jobs, fired about 100 employees and shut down its headquarters.
“When I spoke yesterday, I asked about a number of cases pending before the CFPB and what you thought would happen to them, and you assured me that you would consider these cases,” Smith told McCernan when he appeared before the Senate Banking Committee.
“During this hearing, I think Elon Musk or Russell Vert, or the person in charge, will stop these cases. How do you respond to this?” she continued.
On Thursday, the CFPB voluntarily dismissed four enforcement lawsuits against Capital One, Rocket Homes Real Estate, Pennsylvania Higher Education Assistance Agency and Vanderbilt.
Consumer Watchdog sued Capital One in January, accusing the bank giant of “cheating” from $2 billion interest in savings accounts by keeping it “in the dark” for better pay options.
“I mean, this raises my question: who's really going to be in charge of CFPB, if this is what's going on while your nomination is being considered,” Smith said.
“Senator, if I'm confirmed, I'm the director,” replied McCernan.
But Minnesota Democrats still looked skeptical.
“Well, that's not clear to me, because we're sitting here talking about taking on this responsibility, because Russell Vought or someone else is dismissing a lawsuit in which you say you're going to review the opportunity before they dismiss it,” she added.
The Trump administration's actions at the CFPB have sparked concern among staff and outside observers that authorities will try to effectively dismantle an institution that has long been opposed by conservatives.
However, in court on Monday, Justice Department lawyers denied plans to eliminate consumer watchdogs and pointed to Trump's decision to nominate McElnan and Vert's intention to “run a more reasonable and efficient office in effect.”
“The predicate to implementing a 'more streamlined and efficient station' means that there will continue to be CFPB,” they write.
