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tv   Consumer Financial Protection Bureau and Export- Import Bank Confirmations  CSPAN  July 22, 2018 12:08pm-2:48pm EDT

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as part of our 50 capital store, the c-span bus recently made the trip to juneau, alaska. on book tv and american history tv, we will feature our stops across alaska, showing you the state's natural beauty and we will delve into its unique history and literary culture. president trump's nominees to lead the consumer financial protection bureau and the export-import bank testified before the senate banking committee. members asked about the responsibilities of white out ,ffice of management and budget the puerto rico recovery efforts and immigration policy. this is about two and a half hours.
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chair: this hearing will come to order. this morning we will consider the nomination of two individuals to serve in critical leadership roles within the administration. i welcome both of you and congratulations on your i -- your nominations to these important offices. i see friends and family here together with you today, and welcome them as well. the nominees before us are kathy kraninger, to be the director of the bureau of consumer financial protection and kimberly reed, to be the president of the export import bank of the united states. these positions are critically important to protecting consumers and the consumer financial products and services marketplace, and facilitating global trade of the u.s. goods and services. these nominees bring years of valuable experience at nonprofits and in the public service, and will provide valued leadership in carrying out missions of their agencies. ms. kraninger has had a distinguished career in public
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service, with exposure to a diverse set of federal agencies, as well as developing a particular expertise in the budget and appropriations processes. since march 2017, ms. kraninger has served as associate director for general government that the -- after the office of management and budget, where she oversees and monitors approximately $250 billion in budgetary resources for numerous cabinet departments and federal agencies. she has also served as omb's principal policy official for issues related to the treasury department, and federal financial regulators. prior to joining omb, she held leadership positions at the department of transportation and the department of homeland security, as well as serving on the staff of congressional committees. given her depth and diversity of public service and experience, i have confidence that she's well prepared to lead the bureau in enforcing federal consumer financial laws and protecting consumers in the financial marketplace.
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ms. reed was considered by this committee last year as the nominee to serve as the first vice president of the export import bank, and today we consider her nomination to be its president. ms. reed also has had a distinguished career in public service, serving as senior adviser to former treasury secretaries paulson and snow. in addition, she has served on several congressional committees and has held impressive leadership positions in the private sector. ms. reed is well positioned to help move the bank forward in a positive direction. with respect to ms. kraninger, some senators have requested a long list of documents including emails, schedules and involvement in memos, white house communications, etc. relating to ms. kraninger's role at omb with respect to the administration's zero tolerance policy and the administration's response to hurricane maria in puerto rico. these requests are designed to go after certain extraneous administration policies that the requestors do not like, and
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would go go far beyond the practice of this committee in document production. indeed, i would not expect this administration or any administration to release documents related to its ongoing deliberative process. and furthermore, my understanding is that ms. kraninger is not the custodian of these records and has given the request for information to the white house. as i've indicated, i don't have an expectation that the white house or the agencies involved will provide these documents, but that's an issue outside this nomination process. the democratic senators of this committee asked me to delay this hearing to seek these documents. i'm unaware of the banking committee delaying a hearing for such a reason. to be consistent, i have followed a similar timeline as the committee has set for then-nominee richard cordray in 2013. senate received the nomination
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from the president on february 13, 2013. approximately one month later, on march 12, 2013 the committee held a hearing to consider mr. cordray's nomination and voted the nominee out of committee one week later, on march 19. similarly, the senate received ms. kraninger's official nomination from the president on june 20, 2018. approximately one month later we are holding this hearing. she has provided all of the paperwork that the banking committee requires. the purpose of these hearings is to provide all senators of this committee the opportunity to ask any questions of this nominee, who will be under oath. i intend to ask ms. kraninger, who will be under oath about her role at developing policy at omb. other senators will be given a similar opportunity and follow up with questions for the record, as we traditionally do. i take the senate's constitutional authority seriously and am confident that ms. kraninger will be sufficiently vetted, as have our previous nominees for this
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committee to provide a recommendation to the full senate on this nomination. as a separate matter, many of us have experienced frustration with the bureau in previous years. in april 2016, former bureau director cordray testified before this committee. senators on the committee sent questions for the record that same month. it took director cordray over 16 months to respond to this committee. it's my hope that if confirmed, ms. kraninger will be more accountable to senators on this committee than director cordray was. and i look forward today to a very vigorous debate, and a vote on the nominees. senator brown? senator: i think the chairman knows that that comparison is specious. but i will get to that in a moment. it was a very simple request. i will talk more about that in a moment. thanks, welcome to the nominees, especially ms. kraninger who brought her ohio family with
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her. good to see you all. and ms. reed, who also has some ohio ties, nice to see you, good to see you both. financial crisis started when greedy lenders lured families into scam loans they could not afford. the whole enterprise was designed to transfer wealth upwards, stripping hard-earned home equity from the middle class, putting it in the pockets of shady lenders and with that, they were successful. and i see that, as members of this committee are familiar with, i see that every day. where i live in cleveland. and my wife and i live in zip code 44105, five or six miles from where ms. kraninger grew up. my zip code 44105 in 2007, the first half of that year, had more foreclosures than any zip code in the united states of america. and you know or should know what that does to families and to neighborhoods. behind all of those numbers were thousands upon thousands of painful conversations around kitchen tables. congress created the consumer
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financial protection bureau to prevent the need for those heartbreaking conversations ever again. like food inspectors, the cfpb hunts down scammers trying to sneak toxic products back on to our kitchen tables. the consumer bureau isn't just a response to the last crisis, it's one of the most important tools we have to prevent the next crisis. though 2008 should have served as a wake-up call for watchdogs and ceos, over the past six years, consumer bureau inspectors have still found plenty rotten in the banking industry. from 2012, to 2017, cfpb won $12 billion, 12,000 million, $12 billion in relief for 29 million americans. 12 billion reasons for wall street to hate the cfpb. lucky for them, lucky for wall street, they were able to install one of their own, mick mulvaney to head the bureau. he's dropped investigations,
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he's reduced meaningful settlements to slaps on the wrist. now he wants his protege to run the agency. for months, i urged the administration to nominate someone to lead the cfpb, who had a track record, a track record of working for consumers. unfortunately, ms. kraninger has no experience whatsoever in consumer protection. mr. mulvaney argued she should be approved because of her management and budget experience. it's hard to see how that's enough, especially given the nominee's refusal to provide information requested by committee members. every one of us on this side of the dais wanted this hearing postponed until we got information about that experience. when the nominee and i met, she said it was out of her hands, she would try to get a response. that was over a week ago. still nothing. the letter was four weeks ago, the response was one week ago. what is the administration hiding? my republican colleagues are concerned about transparency and about accountability, and responsiveness, they should note
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this nominee's failure to reply to a simple request about her responsibilities and her current job. again, a request that was submitted four weeks ago. here is what we do know. at the office of management and budget, she signed off on a $1.9 trillion tax break for millionaires. to pay for it, she helped write a budget, she called it an aspirational document to me, that would triple the rent for families that are already struggling to get by. $1.9 trillion in tax cuts, 80% of those tax cuts over time go to the richest 1% and this administration, with the approval of the designated to be head of cfpb, is willing to triple the rates for families already struggling to get by. she's involved in the management of one disastrous policy after another. the botched response to hurricanes in puerto rico, has left american citizens, american citizens, to fend for themselves. a housing policy that undoubtedly will increase homelessness.
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the administration's cruelest policy yet, separating children from their parents at the border. i hope we will know more about -- by the end of the hearing. these issues go to the heart of how she will handle any new job. management is supposed to be ms. kraninger's one qualification. nobody wants mr. mulvaney out of cfpb faster than i do. but american consumers can't afford five years of someone who stands with the bankers and the administration and stands with, the bankers and wall street. we need a cfpb director who will sit with hard-working families at their kitchen tables. i know my republican colleagues are eager to move this nominee in spite of the administration's stonewalling. i wish they showed a little of this kind of urgency when it comes to the jobs that have been put at risk by the failure to have a functional export/import bank. ms. reed has returned for her second appearance before the banking committee. she is well qualified to lead
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ex-im. our committee it voted overwhelmingly to support her nomination as first vice president last december. there are 109 export credit agencies and credit programs around the world that support foreign manufacturers, but the u.s. has literally, has unilaterally and literally disarmed. when it comes to helping exporters, the policy of some of our colleagues seems to be, america last. it's been four years since the senate confirmed an ex-im -- leaving ex-im partially shut down for three years. american businesses have transactions worth more than $40 billion pending at the bank. yet there's been stonewall from this committee and this republican leadership for years. those deals and the resulting jobs will move overseas unless the bank's board is restored. if president trump and republicans are serious about helping american manufacturers, after three years of obstruction, there's no other word to describe it, they should
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urge the majority leader to schedule the consideration of ms. reed and the other xm board members immediately. since you brought it up at the and end of your opening statement, i want to say one more thing. there is simply put no comparison to rich cordray in this process. 730 days passed between his nomination and his confirmation. july 18, 2011, to july 16, 2013. almost two full years. ms. kraninger was nominated one month ago. two years, one month comparison. mr. cordray, look at his qualifications, ohio attorney general, solicitor general, clerk for supreme court justice kennedy, argued in front of the supreme court six times, deep experience with consumer rights and civil rights laws. cordray's qualifications were never under question, but 44 republicans signed a letter saying they would support no one, no one to head the agency
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unless we changed the law to weaken the agency. cordray's first nomination died in the senate. when he was renominated, even after having a clear track record at cpfb, republicans continued to oppose his nomination until we defanged the cfpb. that's what wall street wanted, so like one bird flying off the wire, they all fly off the wire. continue to side with wall street to defang this agency. all we ask for with ms. kraninger is a response to basic questions regarding ms. kraninger's current job, so we can evaluate her management skills, which this nomination hangs on. again, it's not her work in consumer protection, it's her management skills. tell us more about those management skills. republicans held up mr. cordray for two years, demanding changes to the law before they would even consider a nomination. so the comparison between that process and this, mr. chairman, is specious. chair: thank you, senator brown. since you decided to go into
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that, i will also go into a further discussion of the document request. it's been described here today as a simple request that goes into ms. kraninger's relationship to some of these policies. the fact is, it's a document request that goes into virtually every conceivable document related to the deliberative process, the budgeting process and the implementation concerning administration policies ranging from immigration to hurricane relief. and now we've had the tax code thrown in as well. ms. kraninger is not the custodian of these documents. she has forwarded this request to the white house. these document requests are obviously designed to go after various policies of the administration, with which the requesters disagree, and go far beyond any precedent of this committee in what it requires of nominees. these requests seek to open up extensive document production in five different agencies, omb, doj, dhs, treasury, and hud, including also the white house
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itself. this is a multifaceted battle with the president being played out in the context of this committee's nomination process. indeed, i would not expect this administration or frankly any administration to release these types of documents related to its deliberative process. as i said before, ms. kraninger has provided all documents and information which this committee requires of nominees. and we will get answers from her today on the issues you said we needed to get information on. senator brown: one more statement. we've never done this before. but i just kind of amazed by this. i'm sorry, mr. chairman, you have to explain the inexplicable in part of this trump white house that simply won't step up on this. if there's a claim, if there's a claim of deliberative process, the white house has never used that claim. they have never even responded to the letter, let alone any of the details, had she been willing to share with any of the members with whom she met one-on-one, including me. she also has not been willing,
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nor has the white house, to give us an answer to the letter, even if the answer is we claim deliberative process, so i just don't, hope the committee is not going to start acting like this, that the white house doesn't have to answer letters, doesn't have to answer questions from members of the senate. chair: it's unfortunate that the committee is starting to get into these kinds of battles, too, i'm discouraged by that and i hope this does not change the tenor of cooperation that we have on many other issues. i understand the importance of this nomination. i understand the long-term battle we've had over the cfpb and its leadership. and the bottom line is, i don't know, i, as i understand ms. kraninger has passed this document request on to the white house. there are processes by which we can all seek documents from agencies and the white house. and i assume you're engaged in that process now. that she has passed this document on. i don't know what their answer going to be. i tell you what i think there's
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will be, but i don't know what their answer will be. that issue is an issue that goes beyond this nomination process. that's my point today. senator brown: i just think there's no incentive for, we continue on their merry way, just like all of you on this committee, that have spoken with justified outrage, particularly senator sasse and senator corker with the president's performance on monday night in moscow, or in helsinki. but there's never a consequence for this administration, because we all continue to do the administration's, all of you continue to do the administration's bidding, whether it's confirmation of ms. kraninger or whether it's passing, confirming another judge, or whether it's passing another tax cut for rich people in this country. if the, why should the president change his behavior when there is never a price to pay? and one price would be, let's not do this nomination until they actually give us an answer on some of these questions. chair: well, like i said, i understand the battle you are having with the president on many issues. i don't agree with transporting
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that battle into this nomination process, and so today, we will proceed. >> would the witnesseses please and raise your right hands, rise please? do you swear or affirm that the testimony you're about to give is the truth, the whole truth and nothing but the truth, so help you god? and also, do you agree to appear and testify before any duly constituted committee of the senate if asked? >> i do. >> thank you, you may be seated. >> each of your written statements will be made part of this record in their entirety. before you begin your statements, as your turn comes, i invite to you introduce your family, who are here with you, if you would like to do so. and ms. kraninger, we will start with you. you may please proceed. ms. kraninger: members of the committee, thank you for the opportunity to appear before you today. it is a privilege to be here as the president's nominee for the director of the bureau of consumer financial protection.
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i want to thank president trump for this honor and the confidence he's placed in me for with this nomination. i would also like to express my deepest gratitude to my family and friends who have joined me today. my parents, dave and pat, as senator brown mentioned are from cleveland, ohio. my older brothers dave and dan and their families have travelled from connecticut. my younger brother matt and his family are watching online. i'm incredibly lucky to have an amazing family who has encouraged me in every endeavor and that has taught me that hard work and dedication, with that, everything is possible in this country of ours. i'm also especially grateful for their steadfast support as i have followed my call to public service and pursued a career serving the american people. my love for our country, its ideals and promise drives my commitment to public service. it sparked my interest in my university summer internship
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program, where i worked for my hometown congressman, senator brown. it inspired my decision to join the peace corps and serve for two years overseas teaching in the former soviet union. there i saw firsthand the devastating impact of communism, the economic consequences of central planning, and the absence of free markets and the rule of law. following the attacks of september 11, 2001, i felt the call even more deeply to serve our country in the time of need. i'm very proud to have served on the leadership teams at both the department you have -- department of transportation and homeland security during that extraordinarily challenging time for our nation. i've also been honored to serve three committees, congressional committees, including the senate appropriations committee under senator shelby's leadership. in my current position as associate director of the office of management and budget, i've take an broader leadership role and i oversea 250 billion
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in budgetary resources and related policies for seven cabinet agencies and 30 other federal agencies, including the bureau and any other financial regulators. throughout my career i've focused on implementing common-sense solutions to complex problems and delivering real value for the american people. while i will not prejudge and cannot predict every decision that will come before me as director, if confirmed, i can assure you that i will focus solely on serving the american people. congress established the bureau for consumer financial protection to insure all consumers have access to markets for consumer financial products and services that are fair, transparent and competitive. i am firmly committed to fulfilling that congressional mandate. to do so, i will establish four initial priorities.
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first, the bureau should be transparent and fair, insuring its actions empower consumers to make good choices and provide certainty for marketplace participants. in particular, the bureau should make robust use of cost-benefit analysis as required by congress to facilitate competition, and provide clear rules of the road. in my experience, effective use of notice and comment rule make something session to proper balancing of all interests. it also enables consideration of tailoring to reduce the burden of compliance, particularly on consumers and smaller-place market participants. second, the bureau should work closely with other financial regulators in the states on supervision and enforcement. nothing is more destructive to competitive markets and consumer choice than fraudulent behavior. under my stewardship, the bureau will take aggressive action
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against bad actors who break the , rules by engaging in fraud and other illegal activity. third, the bureau must recognize its profound duty to the american people to protect the data in its possession. under my leadership, the bureau would limit data collection to only what is required under law, and is necessary to carry out its mission, and ensure that that data is protected. the issue needs more attention because consumers are unaware of the vulnerabilities they face , and unsure what steps to take to protect themselves. fourth, the bureau must be accountable for its actions, including its expenditure of resources. as a former congressional staffer, i appreciate the importance- importance of overseeing this agency. i value the advice and perspectives you've shared with me in the meetings over the past month. conversations that i welcome going forward, should i be confirmed in this important position. thank you for your consideration. thank you. chair: ms. reed? ms. reed: chairman crapo, ranking member brown, senators, thank you for the opportunity to appear before you today.
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thank you as well for this committee's favorable bipartisan vote to advance my previous nomination to serve as first vice president of the export import bank of the united states. i now return to you as the president's nominee to serve as president of ex. a position that includes serving as chairman of the bank's board of directors, i thank president trump for his confidence in me to advance ex-im's mission. creating and supporting american jobs by facilitating the export of u.s. goods and services. if confirmed, i will be both the first woman and the first west virginian to be president and chairman of this 84-year-old institution. i also appreciate the encouragement and support of the president's national economic council chairman larry kudlow, and diverse organizations focused on american prosperity. i would like to recognize my father terry and sister ashley. i lost my mother, janet reed, an an to cancer when i was
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, nine years old. and tomorrow would be her 70th birthday, so i send her my love and i know that she is with us. i thank you for your encouraging and supportive individual meetings, to discuss your views and the positive impact it's made for the workers in your states, and the potential to do more to support them. if confirmed, i will work especially hard to maintain open lines of communication with you and the congress. i'm grateful for the support of my home state senators shelly , moore caputo and joe manchin, i would bring the grounding of my west virginian upbringing to ex-im. in 1985 senator caputo's father, governor arch moore bestowed upon me a golden horseshoe pin for an academic award that i wear today. its inscription reads, free." neers are always i believe that freedom in the form of free market principles is the best way to foster economic opportunity for all americans. throughout my 22-year career, i've embraced these principles to make a positive difference
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for our nation's businesses and workers, while also protecting the american taxpayer. i would bring these values to ex-im. still, there is room for improvement to keep america on this road to prosperity, and ex-im is no exception. if confirmed, i will work to -im faithfully implements all laws and reforms enacted by congress. i would launch a review to ensure that ex-im truly is the bank of last resort, and not the other way around. there are now 109 foreign export credit agencies or ecas in other countries, up from 95 when i testified before you last november. ex-im recently reported the increasing weaponization of export trade credit by the world's ecas to increasingly nationalistic policies, particularly those by china. if confirmed i look forward to working with the administration and congress on an aggressive response to china's unfair trade policies.
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in a perfect world, there would be no eca financing. if confirmed, i will work with the u.s. government and as appropriate, the oecd, g20, wto, and other forums to move towards the ultimate goal of the eliminating all eca financing. on that, you have my pledge. until that goal is reached, the united states should not unilaterally disarm in a fiercely competitive global economy. while we negotiate, we should not place our nation in a worse position than our foreign counterparts. as president trump stated regarding export financing, when other countries give it, we lose a tremendous amount of business. therefore, if the senate confirm s a bank board quorum, i will take responsible steps to get ex-im operational, so america can compete on a more level playing field. ex-im has more than $40 billion in pending applications supporting 250,000 u.s. jobs. , we need to keep and support these jobs in the united states.
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while the, at the same time, work to reform the export subsidies of our competitors to save even more. we can do both. ex-im must also treat all especially small and medium american companies fairly, enterprises. i would ensure that ex-im, working with community banks and community development financial institutions fund that i'm so familiar with, help small businesses and agriculture sector, which is vital to rural america in closing i would like to underscore the good governance is critical. ex-im, which has a very low, 0.4% default rate is self-sustaining because of the fees and loans it charges to the foreign purchasers, and has returned $14.6 billion to the u.s. treasury since the year 2000. we need to insure that it stays that way. building on my time in the congress on oversight investigations and government reform, i would focus on strong increased transparency, and standards of conduct, sound management practices. i would work with you and our inspector general to insure we
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are doing all we can to eliminate waste, fraud, and if you scum and give better value to the taxpayer. thank you for your consideration and i'll be pleased to answer any questions. chair: thank you, ms. reed. i'll start my questioning with you, ms. kraninger. as was obvious in the opening discussions between senator brown and myself, there is a desire on some, on the part of some of the senators on the committee to know what involvement you had, if any, in certain policy decisions that been made by the administration? can you discuss to what extent, if any, you were involved in the development of the administration's zero- tolerance policy? mr. kraninger: senator, i appreciate the question. i had no role in setting the zero-tolerance as i have said to policy, many members in our meetings. they've recognized the reason for the question being asked. it is important to note that the office of management and budget has an extensive role in supporting agencies as they implement the president's priorities and agenda. that includes legislative proposals, regulatory proposals,
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budgetary resources, and those kinds of facet of things, so it is clear since the beginning of administration, immigration policy, border policy has been a detailed discussion within the administration and there have been various meanings at all levels of the administration that i have attended with the deputy and deputy or her. in addition to this, i do that thehat preservation of the political process is critical to develop policies and implement policy. i don't believe it is appropriate or right for me to articulate the advice i gave for -- or toturned rise categorize what others have brought to the table. but i can assure you that in
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every position i have held an individual i have supported in my career, i have been -- i have given my best advice, and that is what i have done in the area of immigration and border security. i had no rolling in setting the policy. >> the same question with respect administration's response to hurricane katrina and -- hurricane maria in puerto rico. in reviewingrole disaster declaration recommendations that go to the president, so we are involved from that point. thelso together supplemental requests that the administration puts forward to the hill and they are necessary. last fall was a devastating hers came season -- devastating hurricane season in the atlantic
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. there were devastating impacts and clearly, additional resources were needed. the office of management and budget supported the president and putting those requests that congress considered to provide the resources necessary. >> ms. reed, u.s. companies are challenged by sets of eyes sports. right now, who is picking the winners and losers in the oval marketplace, and who if anyone should be? right now, sir, the united fores is not taking winners the united states workers because we are not operational, so as i mentioned in my testimony, we have 250,000 jobs -- thesed these ported jobs that could be reported.
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if i am confirmed, i will not pick winners or losers. that is what the charter passed by congress dictates. i will uphold the law but will do all i can help our small businesses in this country. aware there you are are number of reforms that many are seeking to see implemented at the ex-im bank. are there for visual part towards size -- are there reforms that you will prioritize? >> we have to protect our american company applicants for seeing their confidential business information, but i will take a look at what we can do to see what ex-im more transparent and we should be focused on good ethics, and if confirmed, we will be standing up or risk
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committee, the improving our chief ethics officer, and i believe we need to take a hard the to ensure the bank is bank of last resort comes to taking a look at tests that and economicter impact and take a look at those again and seek input from all the experts. there are many diverse opinions on this and i think as we look at reauthorization in 2019 that we take a look at that. senator brown: a week or so ago we had a good discussion and my office. i appreciate you taking the time in the conversation that i had. -- in the conversation we had. i asked about tripling the rent for low-income people, about the 600% interest that people more often than not pay when they get payday loans. the speaker of the house in ohio
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resigned, as you probably know, under a scandal about payday loans recently, the first time in our history. your answer to all of those seemed to be the market will take care of this. and i only just suggest to you that i don't think that philosophy recognizes how expensive it is to be poor in this country. and i ask you as i asked secretary carson, that you read the book "evicted" by matthew desmond. because i think it speaks in a way that is really important to understand those issues better. couple of questions. your response to the chairman was that you did not set policy. i understand that is the term that you used, and it was a term used twice in response to the chairman that you did not set policy. but you do help to execute policy.
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would you talk about, i'm interested in what you did, not what you didn't do. talk about executing policy. talk about what resources you moved around on the zero-tolerance policy, since neither you nor the administration seem to want to tell us that, in response to that letter. mr. kraninger: i appreciate the question. with respect to the zero-tolerance policy, i will note again i did not have any role in setting it. when the attorney general announced it, it was his prerogative to do so, and the department of justice has repeatedly asserted they do have the resources to support their mission underneath that policy, and have done that, so the attorney general has announced publicly traded senator brown: i'm sorry to interrupt, but tell me what you did do with the general-tolerance policy. mr. kraninger: it had sufficient resources. the department of homeland security and the health and
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human services department, which is not under my purview but i am aware of some of the things they are seeking there. those secretaries have raised questions about the policy, and were looking at their run resources to support that implementation. and again, the office of management and budget is there to support those agencies, to ask questions on those matters. >> what did you actually do in your position on that policy? >> there were meetings after the announcement of the policy as the secretaries raised russians were looking at their own resources to try to figure out how does the work that implementation, and again, the office of management and budget are there to support those agencies. but it would be chilling to the
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deliberative process to give you substance on the discussion. i appreciate what you are asking. it but i don't think it is appropriate to get into the letters of my advice cleared the office of management and budget reports the need in looking at the appropriations law and the needs that are made known to us. same nonanswer to the letter. i asked you to name actions that you support. you didn't come --with any answers for the with any answers. >> on that point specifically as i noted in my statement, i do support the bureau exercising its authority to take enforcement matters when bad actors are operating. >> i am sorry to interrupt. , theecifically to areas
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investigations that were launched under his leadership and were continued under the current administration, equifax, certainly, a lot of members we discussed extensively, concerns about credit reporting agencies, and equifax fallout will be with us for a long time as a nation and an issue i think many are grappling with. theuld be grapple with mistakes that were made there. it the wells fargo enforcement action as well as an area that . >> one last question -- what enforcement actions with director cordray took skimming first responders. it it struck down their claims agreeing with the president's
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court at the bureau is unconstitutional. would you challenge that ruling? words, are you going to take the side of the 9/11 scammers for those who were scammed as you decide what to do in this court case? >> and please make your response romped. of the aware constitutionality. the director has a responsibility to carry out the established,n and and that is my focus. senator corker? >> thank you for your willingness to serve. i do want to respond to ranking member brown with sincere warmth , we came in together and i have enjoyed serving with you. it seems to me that what has been happening is, if we don't like something the president
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does, and i will take a backseat to no one in challenging foreign-policy issues, tariff issues with every ounce of energy that i have, but if we don't like some of the things the president is doing, we should then have nominees that we like. i got a call after the helsinki press conference, which to me was one of the worst i have seen, from a leading democrat. i've shared this with some of my friends. and he said, corker, you need to block the supreme court nominee. well, i could hit myself in the knee with a sledgehammer too, but why what i block someone that i generally like over something the president has done? and i just want to say, and again, i will take a backseat to no one. senator menendez and i had a conversation about this yesterday, but it is actually you that is doing the president's bidding on tariffs. senator toomey and i tried to block this terrible policy that
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is costing americans jobs, taxing americans, taxing americans, and you are actually doing his bidding. so, i could throw that right back. what i would live to see happen is, if we could somehow depoliticize this bureau. i mean, it started out in a way that was controversial under. frank, and it did. it was the thing that kept us from having a bipartisan bill on dodd frank. it was this agency that kept us from having a bill that would have stood the test of time. i think we could have come to an agreement if it weren't for the way that this was set up, without a board and dividing all of us. so i would like to see us somehow figure out a way for this agency to go forward. there are abuses that happen, and the bureau has done good things in that regard. it is also, in some cases, it feels -- done some things that were somewhat political will.
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somewhat. i had a good relationship with cordray. i enjoyed working with him. so, i would like to ask our nominee, what is it that you can , toleading the department try to call this whole -- to try to cause this whole political atmosphere around it to diminish? as its leader so that we don't have these types of processes every time anything comes up regarding this bureau? ms. kraninger: thank you, senator, for that question. it is critical to the discussion happening today, and have been happening for years on the bureau. what i bring to this position and why i was selected by the president for this position is precisely that. 20 years of government service, working for common sense solutions across the aisle, working with members on both sides to support the best outcome for the american people, and that is certainly what i pledged. this agency clearly needs solid
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management to take it forward, to become part of the financial regulatory framework of this , as a mature regulator, and that is the direction that i would like to take it if confirmed. and i firmly believe that we can continue to push for transparency and accountability of the bureau again, to really have a clear decision-making process that takes into account all of the interest that are across the nation from consumer groups to the financial institutions, to all of you here today, to make the best decisions and put forward the best actions for the american people. sen. corker: i am chairman of the foreign relations committee, and there are people on the staff that are just outstanding, the finest people i have ever worked with in my life. in what are specialists they do and i call upon them to help me doing what i am doing. it is my understanding you have
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people like that already at the bureau, who work, who would be working underneath you, if confirmed here and one of the challenges people have put to you is you have not been in this area. but it is my understanding you have some very capable people that work underneath that are specialists in the area the bureau will be dealing with. is that correct? ms. kraninger: it is. i look forward to meeting with them, understanding details they have taken, recommendations they have made and moving the bureau forward. sen. corker: if you would, state , state -- i know i have got three seconds left. let me say to ms. reed, i enjoyed seeing you in uganda. i appreciate the meeting that we had in our office. i know senator toomey and others have focused on some reforms that they would like to see take place. many of us are years have hoped the department would reform. i hope we will be able to work
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with you and others to make that happen, and thank you both for your willingness to serve. with that, i am the standing chairman, and i call on senator menendez. sen. menendez: thank you. you have been nominated to leave the agency that is singularly cast with protecting american -- singularly cast of protecting consumers from predatory financial practices, from seniors to service members, students. we created the consumer financial protection bureau to be the cop on the beat for american consumers. when we met, and i appreciate you coming back, you told me your management experience at omb has prepared you for this role. so, i want to ask you about that specifically, about the administration's response to puerto rico. hurricane maria tragically killed thousands of people, resulted in the longest blackout in u.s. history, and left puerto ricans without access to clean water for weeks. it took fema two weeks to send texas three times the amount of
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staff it sent to puerto rico two months later. now, i sent you a letter asking for information about your role in puerto rico, and i asked for a response by this past monday. you failed to provide one. as it turns out, i have enough that demonstrate your involvement in the trump administration's response to hurricane maria, although these are not emails you provided to us. in my office, you told me you are not only -- you told me not only were you involved in the response to puerto rico through your oversight of fema and others, but that you oversaw the development of disaster aid requests to congress. let me ask you here, and provide brief responses because we know the answers. in the first aid package congress passed after hurricane maria, most of puerto rico's aid came in the form of a community disaster loan that can only be forgiven at the discretion of the secretary's of the homeland security, conditions not applicable to texas.
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is it true that puerto rico had to wait five months to receive this funding, yes or no? ms. kraninger: not exactly, senator. the cdl loan was an unprecedented amount of resources being provided that congress deemed appropriate -- sen. menendez: did they wait five months to get the money? ms. kraninger: no, senator, i don't believe the governor has availed himself of this option yet. at the same time, it is an unprecedented amount of money -- sen. menendez: let me tell you what happened since you have a different recollection. the administration withheld the loan from puerto rico, arguing it had a balance at the end of 2017, and therefore, didn't need the money. i am sure there are some in texas and florida. in november the governor , 2017, requested $94 billion in recovery funds. in response to this request, how much money did you request from congress?
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ms. kraninger: the request actually included a addendum to the letter that said additional funds would be requested. sen. menendez: give me the dollar figure? ms. kraninger: it wasn't as civic amount for the disaster relief fund that applies to all of the disasters. sen. menendez: and that amount was $44 billion, was it not? ms. kraninger: yes, i believe that's correct. sen. menendez: and that was to be split among texas, florida, puerto rico, and the u.s. virgin islands, is that correct smr ms. kraninger: yes, senator. there was a note that there would be additional. sen. menendez: november, you requested audit cuts to offset funds to puerto rico. in your extent, does congress require offsets for supplemental disaster funding? ms. kraninger: i am sorry, senator, does the congress -- sen. menendez: require offsets for supplemental disaster funding? ms. kraninger: center, my role roleic we -- senator, my
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at omb is to make recommendations. these are the -- sen. menendez: is the answer yes or no? does congress require offsets for disaster funding? you and i both know the answer is no. ms. kraninger: [speaking simultaneously] sen. menendez: the answer is no. you know that. ms. kraninger: it is a conversation that has been had, senator, and i appreciate your perspective on it. sen. menendez: did you -- amazing. did you advocate for unprecedented policies that would have conditioned puerto rico's receipt of disaster relief funding on the oversight of the island's unelected and unaccountable control board? ms. kraninger: senator, as i noted earlier i don't think it , is appropriate to characterize my advice. you see the request the administration provided to the congress and that congress -- sen. menendez: in your emails you see a role for the board. look, you were a significant architect of the trump
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administration's response in puerto rico, which was at best, offsetting. it reflects the administration's most insidious views about hispanic americans. 3.5 million american citizens, who just happened to call puerto rico their home, but they are american citizens like you and i are faced their darkest hour, , and instead of turning to help them, you pinch pennies. and worst of all, i think you treated them like second-class citizens. that does not give me faith that when you have to stand up for seniors, service members, students, homeowners against some of the biggest financial institutions in this country, that you'll do that. if you couldn't do it for the people of puerto rico, i don't know how you are going to do it for anybody else, and they are u.s. citizens, ms. kraninger. sen. corker: thank you. senator toomey. sen. toomey: thank you, mr. acting chairman. and i want to thank our two guests today for their willingness to serve. let me start with ms. reed. thank you for coming by my office. i appreciated the conversation that we had.
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that i it is no secret have been very concert and a skeptic about ex-im bank, skeptic about its fundamental mission. in my view, it is by its nature intrinsically forced to subsidize -- it forces taxpayers to subsidize companies, distorts markets, picks winners and losers by virtue of its very activity. there have been episodes of waste and fraud and abuse. historically it has not been particularly responsive to congress. despite all that, i was willing to vote to confirm a quorum of board members provided a reformer like scott garrett be leading this organization. our pro-ex-im senators decided not to have a quorum, so that's where we are. however, consistent with my interest in seeing reforms, i was pleased with her testimony. emphasize a number of areas where you have committed to us that you want to pursue reforms,
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'd like to just have a specific series of questions that i would pose to you. just give me a simple answer as to whether or not these are areas that you would work with us for reform. so specifically, will you work with me and other members of this committee and the senate to increase transparency at the bank to the greatest extent that it's practicable without divulging confidential business information? ms. reed: yes, sir. sen. toomey: will you work with me to strengthen taxpayers from deals that go badly? ms. reed: yes, sir. sen. toomey: will you work with me and members of the committee to improve protection for domestic companies from economic harm that might arise from ex-im financing from foreign competitors? ms. reed: yes, sir. sen. toomey: will you work with us to ensure that ex-im is not crowding out private financing options that would otherwise be available for ex-im's involvement? ms. reed: yes, sir. sen. toomey: and will you work with me and the committee to crack down on bad actors,
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whether they are employees of the bank, or its customers, who should be dealing with a bank? ms. reed: yes, sir. sen. toomey: and will you work with all of us and the administration to meet the statutory requirement that we globally? uce eca's ms. reed: yes. sen. toomey: thank you. miss kraninger, two things. one, under the previous regime, the cfpb, occasionally engaged in imposing policies that had the effect of being a rule without going through the administrative procedures act. they decided to use enforcement and guidance to impose their will without following the legal requirement that they subject such a proposal to the scrutiny that is called for in the apa. there's one case, in fact, where it was so egregious that the senate acted to repeal the rule. the indirect auto lending was exactly such a case where a guidance was the mechanism they used to impose what should have gone through it the rule-making process. never did.
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the congress recognized that and has since repealed it. my question for you, will you commit to using the administrative procedures act when you -- when the cfpb imposes new rules? ms. kraninger: absolutely, yes, senator. it's critical to the process. sen. toomey: thank you. section 1071 of the dodd frank act, unfortunately, instructs the bureau to collect and compile data on small business lending. i say unfortunately, because this is meant to be a consumer bureau, not a business bureau, but nevertheless, the law says what it says, and i understand you have to comply with the law. my understanding is that section 104 of 2155, s-2155 which was recently passed and signed into law, addresses the challenge of overly intrusive data collection with respect to mortgage lending, so there is some relief built in there, but it is narrow. it is narrow. it applies only to small mortgage lenders.
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my understanding is that section 1071 of dodd frank does allow the bureau to make exceptions to small business data collection. so my question for you is, in implementing and complying with this part of dodd frank, this requirement, will you commit to working to minimize the undue cost burden, administrative aggravation for small business compliance with this part of the law? ms. kraninger: senator, i can absolutely commit to you that the law will be carried out. and the authority given to the bureau to tailor that narrowly is something i will look at. i can pledge i will. this is an ongoing action the bureau is looking at, and it is an area to your point the law requires the bureau to act. i don't want to prejudge it. at the same time, i appreciate
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where you are coming from and understand the need to limit. sen. toomey: very briefly because i know i am out of time, can you confirm, do you agree with my interpretation that 1071 is the only respect in which dodd frank mandates the bureau to deal with small business? ms. kraninger: senator, it is very clearly one, and i have not read all of the enumerated consumer laws, there are many. at the same time, i absolutely believe there is a limited intent for the bureau to be engaged in small business oversight or engagement. so that is something that should be limited. sen. toomey: thanks, mr. chairman. sen. corker: thank you. sen. tester. sen. tester: i will start with you, ms. kraninger. it is no secret that mr. mulvaney is no fan of the cfpb.
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that aside, would you say he has done a good job in his role as acting director? ms. kraninger: senator, i would say that the acting director is focused on two priorities -- sen. tester: i know how to filibuster. you know how to filibuster. just answer the question. i has he done a good job? ms. kraninger: he is my boss, and he has actually been focused on implementing the law. from that standpoint, yes. sen. tester: so one of the things you were going to bring to the cfpb, i want to focus on the second one. work aggressively with actors, and take action against bad actors was one of them. i think that is a noble thing to do. mr. mullaney has pulled back the payday lending role, he is -- he has pulled back the prepaid accounts rule and has done more things than quite frankly, i have got fingers, ok?
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did you support them in those then? do you think that those are the right actions to take? because it goes in my opinion, contrary to your number of what you plan to bring to the agency? ms. kraninger: i understand your interest. i will attempt not to filibuster you, senator. i have to say i will take aggressive action if i am confirmed. and i do believe the acting director, the information -- sen. tester: do you plan on reinstating the payday lending rule? ms. kraninger: senator, it is under active consideration. from that vantage point -- sen. tester: are you going to recommend that they reinstate the payday lending rule? ms. kraninger: i think it's important to let the process happen on this, because it is actively under reconsideration, and so it's not appropriate to comment. i understand your interest in it, sir. sen. tester: so, look. you have probably got the votes to get confirmed, but i have got
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to tell you that i have listened to the questions today, and you can answer the questions, you really can. all you have to do is answer them. you are going to be the head of this agency. you are going to be leading this agency. your recommendations are going to count for something. and so, it would be really helpful for me to know if i am going to vote for you, or not vote for you, where you are at? where you are at? not the people under you. ok, let me ask you another way. one of the other things that the previous -- that mulvaney did was he appointed political folks to track career folks within the agency, the same folks that you said you are going to be looking forward to working with. do you intend to keep those political folks on board within any agency, if and when you become director of the cfpb? ms. kraninger: senator, i'm going to take every staff member individually, have a
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conversation with them to understand what they have been working on and what they would like to continue working on, but i have not prejudged having political or career staff continue. i think it is appropriate to give them that opportunity to have that conversation. sen. tester: ok. so, you oversaw the treasury department in your position at the omb. correct? that is one of the seven you oversaw? ms. kraninger: yes. sen. tester: earlier this week, the treasury department and irs announced that it is one of the swampiest decisions i have quite frankly ever seen. they have made a decision to allow for these c4's not to have to report money that they have received, nonprofits. allowing donations to those c4's over $5,000 not have to be reported to the irs. do you agree with that decision?
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ms. kraninger: senator, i understand that they published that decision. i can tell you i did not have a role in it. sen. tester: i know, do you agree with that decision, whether you had a role or not? do you agree with that decision ?m ms. kraninger: since i have not read the law in that area -- sen. tester: so it's going to allow these organizations to hide where they got their money. is that ok? ms. kraninger: senator, i think they looked at the law and the requirements -- sen. tester: so, let me ask you this -- the number thing you are one going to bring to the bureau is transparency and accountability. can you tell me that that decision, just sitting on the outside looking in, whether you are oversight of that agency are not, the treasury department, and how you can actually say, i don't have an opinion on it, when it deals exclusively with transparency? ms. kraninger: and senator, i can tell you at the bureau i am committed to that. sen. tester: let me ask -- i'm not even going to ask, i'm just going to make a statement. i liked your document that you give us that was your opening
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statement. it said a lot of good things i agree with, protecting data, we could get into equifax, but i am not sure we would get into answers. accountability fractions, i like that, transparency, working closely, holding bad actors. but by the way, your answers did not reflect those values at all. thank you, mr. chairman. sen. corker: senator tillis. sen. tillis: well, welcome. before i get into the questions primarily towards ms. kraninger, ms. reed, i want to talk a little bit about what we -- thanks to both of you for coming to the office, but i want to talk a little bit about what i believe, why i believe the ex-im needs to become functioning again. you talked about an increasing number of equivalent agencies in the global markets.
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i for one think we have got to get away from this either/or proposition, talking about the reality that if we don't have this in our toolkit when we are competing in the global market, that we disable ourselves, much the same way we do when we get out of economic incentives. do you agree with that? ms. reed: yes, senator. sen. tillis: do you think that with the ex-im bank, for the improvement, the transaction would go a different way? can i get your commitment to come back either to my office or before this committee and tell us what that would look like so we can get to a better place and better certainty for the long-term of the ex-im bank? ms. reed: absolutely. sen. tillis: a lot of people ask you a lot of questions and gave you limited time to answer. would you like to respond to anything before asking a couple of questions?
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ms. kraninger: thank you, senator, for that opportunity. i recognize senator tester wanted to hear more about my views. i could certainly talk about challenges with the payday lending arena. i do take the point of the conversation i have had with senator brown on challenges for hard-working americans out there. and i think what would be helpful is continued competition in the small-dollar lending space. i would say comptroller audit action and trying to work with traditional banks to bring additional products and services to the market is something that would be useful, but i certainly -- it's a difficult position to be in because it is on the regulatory docket for the agency, i know that, and it is something that cannot be prejudged. and so, i respect the process there, but certainly has spent time looking at this issue, and looking forward to further getting into it. sen. tillis: the, i think in the opening testimony, the ranking member talked about folks on our
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side of the aisle working hard to defang the cfpb, and i am one of those, because if you look up defang in the dictionary, it has something to to do with taking the fangs out of a snake to make it less poisonous or less threatening. and in my opinion, the cfpb is the first agency of its kind that is not accountable to anybody. because after you get confirmed for a period of time, just like your predecessor, you don't even really answer to the president. you certainly don't answer to the congress. and when mick mulvaney, or director mulvaney was here, i -- his goal ofhe trying to understand that it should be an agency more accountable to the president. do you or do you not share director mulvaney's view that this is an agency that has great power and no accountability, and that that is not good for any
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area of government? ms. kraninger: clearly, senator, the congress through dodd frank act gave the bureau incredible powers, and incredible independence from both the president and the congress in its structure. i have noted that my focus is on running the agency as congress established it, but certainly working with members of congress, i am very open to changes in that structure that will make the agency more accountable and more transparent. sen. tillis: i for one, for those who are not going to support your nomination, i for one think this is a great time for us to come together and move that accountability of funding back into congress so they can have some say because the fact of the matter is, you like mick mulvaney, don't really have to care, but for your interest in democracy and your respect for congress. you don't have to care one bit about our opinions about your activities. and unless we get to a point where it is accountable to congress, that is going to
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continue. and i for one hope that you go out there and you work on clawing back regulations that on the surface, look like they are passed for protection of the consumer, but in many cases they are harmful ultimately to the consumer, either in terms of cost or access to capital. i look forward to supporting your nomination. i also welcome your family and friends here. the nominees are doing just fine and i look forward to supporting both of you on the floor. sen. corker: senator warner. sen. warner: welcome, to the witnesses. ms. reed, i look forward to supporting you. you are a lucky witness this morning since you, your colleague is receiving most of the attention. i am sorry senator corker is no longer here. i was here at the start of dodd frank and cfpb, and the original original proposals around cfpb were to set it up to set it up
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had traditional oversight, but some members in the minority's position was they did not want to create a new box, a new entity, so it was put in this i agree rather unique framework inside the fed with that certain funding stream. but i think the history would demonstrate that that was how the rather unique aspects of the cfpb came to bear. ms. kraninger, i want to drill down on a couple of specific areas. i think in every aspect of the cfpb work, it needs to make sure that you use data-driven decisions rather than agenda driven decisions. senator warner and i expressed our deep concern about director mulvaney's skepticism of data
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collection by the cfpb. he has been hostile to data collection and the use of data. i think we froze data collection for six months. i read of a planned survey on debt collection disclosures. and i'm deeply concerned that one of your full priorities was to limit data collection to what is "needed and required by law." and i know as well, and i have benefit favor of cost- analysis, but how do you do a cost-benefit analysis that is going to be act or it and it -- going tobase, if be accurate and adhere to that base, if you are not able to do appropriate data collection to influence your decision? how can we be assured that it is not going to be a political-driven agenda rather than a databased driven agenda?
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ms. kraninger: senator, i appreciate the question. i am absolutely committed to data-driven decision-making, and should i be confirmed, that would be a focal point of the bureau. i think to the extent that it is supporting that decision-making, the data collection would be needed and required. i also think it is important to distinguish here between the data that comes through the request for information that is out to the public. there are a number of sources of evidence that come beyond the entities that the bureau is supervising directly. and so, ensuring the consumer groups have the opportunity to respond, to provide information, using the benefit of a lot of the academics that are there. sen. warner: i would simply say if we are going to do rulemaking on debt collection practices without talking to those people who have been targets, customers, can immerse, users of those debt collection services, i don't know how you can reach a conclusion.
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it the ranking member and many on this side, i don't always agree. i generally come with a pro-business bias. i have been in business longer than politics. but i have to tell you, i think the power in most business -consumer relationships have shifted away from the consumer towards business. andi see this particularly, we discussed a little bit of circumstances surrounding credit-reporting agencies. you and i don't have an option to choose to be customers or not with credit-reporting agencies, and i am very concerned, not only in credit reporting, but as we move into increased areas around social media and elsewhere. i'm not sure that even a relatively-informed consumer can simply sign away all of their rights with this growing imbalance where the business has all the information, all the data, all the tech tools, and
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you are stuck with a click here, i agree, in print that no one can read or even if you could read, you couldn't necessarily understand. are you concerned about this imbalance between ' ability to collect consumers' data knowing and oftentimes unknowingly, and what do you think the cfpb should do to help protect consumers in this growing arena? ms. kraninger: senator, i appreciate the question and enjoyed the conversation we had. specific to the credit-reporting agencies, just to take that, because that is a critical area where the bureau is spending a significant amount of time. i look forward to the results of the equifax investigation to understand what is happening there, to look at what the bureau staff has found in terms of the concerns. and i do think that the customer relationship there is really between the agencies and the financial institutions.
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so, ensuring that the consumer is protected in that situation, and that they are really limiting the information they are collecting to what is appropriate, and they are protect it, and the consumer has a measure of control and involvement in that going forward, is actually something that makes sense to me. and i look forward to getting into that more with the federal trade commission and the bureau staff if confirmed. sen. warner: my time is expired. mr. chairman, i want to note for the record, i appreciate your interest in the subject and the fact we have had a couple of hearings. i got to tell you, if this committee takes up any other legislative activities this year, it is going to be my intent to make sure that credit has appropriate garb rules, a year after equifax. still nothing has happened and that is on the top of my priority list. i hope we will be able to work together. thank you. sen. corker: it is a high priority for me as well as data collection in general. as i have discussed with several with you. and i hope we can prioritize that i make progress. senator warren.
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sen. warren: thank you, mr. chairman. one thing consumers need in a cfpb director is someone who can stand up to powerful people on behalf of those who don't have power. and that is why i want to focus on the trump administration child separation policy. -- the trump administrations child separation policy. since march 2017, you have been the head of general government programs at the office of management and budget. is that right? ms. kraninger: that is correct. sen. warren: it is an important job. the general government programs at omb is in charge of the department of justice and department of homeland security. is that right? ms. kraninger: yes. sen. warren: and according to the disclosures you submitted to this committee, you "serve as omb's principal policy official for issues related to the departments and agencies you oversee." is that right? ms. kraninger: yes, senator. sen. warren: so the justice department and homeland security are the two agencies most responsible for taking children away from their parents at the
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border, and you oversee policy issues at both agencies. but for a month now, you have refused to respond to ranking member brown's and my request for information and documents related to your role and child separations. and when we met in my office last week, you refused over and over to give me a straight answer about your role. so today you have given a very lawyerly and limited answer. you are dodging. the answers have also been contradictory. you said you have no role in setting the policy, but you also can't describe the advice you gave on the policy, which means it raises the question that you had no role or you had a role and you can't describe it. so, i'm going to ask you again, under oath were you involved in , any way in developing or implementing the policies that
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led to his administration to take thousands of children away from their parents at the border? ms. kraninger: senator, i had no role in setting the policy. sen. warren: please answer my question. it was developing or implementing. ms. kraninger: i had no role in developing it. in terms of its announcement by the attorney general -- sen. warren: the attorney general announced it, but otherwise did you help develop or implement this policy? ms. kraninger: subsequent to the attorney general's announcement, there were meetings in the administration on the general topic of the implementation. and again, the office of management and budget -- sen. warren: so is that a yes? you were involved? that is a yes? ms. kraninger: senator, again, i don't want to characterize sen. warren: i am asking you a pretty straightforward yes or no western, and i will remind you, you are under oath, and like to congress is a crime. and many of the documents i requested about your role in this policy could eventually become public under the freedom
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of information act. so, let me ask again. this specific question -- were you involved in developing or implementing the policies that led to children being taken from their parents at the border? ms. kraninger: senator, it is difficult to separate -- sen. warren: i will take that as a yes. ms. kraninger: as i said, i cannot characterize the advice -- senator warren: i'm not asking you to characterize, i'm asking you a simple yes or no question. according to reports, in some cases the trump administration isn't sure which children belong to which parent. as of monday, the administration had not identified the parents of 71 separated children, which means right now, they can't be reunited. dhs is the agency that took parents away from their young children. did you work with dhs to create a plan for eventually reuniting these children with their parents? ms. kraninger: senator, again, i can't characterize my advice.
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as we also discussed, since -- sen. warren: did you work with them on a plan? i didn't ask what the plan was or what advice you gave. did you work with them on a plan to reunite these children who were taken from their children? -- to reunite these children en away fromk their parents? ms. kraninger: i understand the question, senator, but it becomes a slippery slope when it comes to characterizing the advice or the analysis or the questions raised. senator warren: it is not us the slope. you don't want to characterize because you don't want to admit you had something to do with this. this was a policy designed to traumatize children and families as a way of scaring them away from the border, even if they were seeking asylum, even if they were fleeing death threats, gang violence, rape, domestic abuse. white house chief of staff kelly said the whole point of this was "to be a tough deterrent."
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the american academy of pediatrics says that in separated from their parents for weeks or months can cause the children irreparable, lifelong , physical and psychological harm. do you think that purposefully inflicting that on innocent children is immoral? sen. corker: and please make your answer brief. ms. kraninger: senator, i think there are many heartbreaking stories that did appear on the news every day, from the conversation we had about american families, hard-working, who are affected by -- sen. warren: it's a yes or no question. do you believe it is immoral to set up a plan whose deliberate intent is to inflict harm on children? ms. kraninger: senator, it's not appropriate for me to provide my personal opinion on internal deliberations and discussions. sen. warren: almost every member of this committee, democrat and republican, has denounced this policy. even president trump, when he signed the executive order ending child separation, said,
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and i will quote, "i did not like the sight or the feeling of families being separated." but you can't have an opinion on this? you know, i went to the border last month. i met a mother who was torn away from her seven-year-old little boy in the middle of the night. she could not stop crying. all she could say over and over and over is i never even had a chance to say goodbye. she had not seen her boy for weeks. she had no idea where he was. you see the videos of these children being returned to their parents after long separations. they are dazed, they are unsmiling, they are dirty, it's like the light has been sucked out of them. these are innocent children who may be scarred forever by this policy. it is fundamentally immoral, and you, you were part of it, ms. kraninger. it is a moral stain that will follow you for the rest of your life. and if the senate votes to give a big promotion to you after
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this, then it is a stain on the senators who do so. sen. corker: senator cortez masto. oh, excuse me, i apologize, i did not see senator moran come in. senator moran. oh excuse me, rounds. [whining in background] senator rounds: thank you, mr. chairman. [voices in background] sen. rounds: mr. chairman, once we have got the noise cleared up, we will ask questions of our two witnesses. thank you. let me just begin with ms. reed.
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woul your role coming in as a chairperson is to make certain that this particular institution, this bank, is capable of competing with other similar type institutions from around the country and providing services so that we can properly export to other countries. i think some people think it's inappropriate that the government would provide a service. i don't. i think it is important we become competitive. can you comment on the propriety of providing businesses with that same type of service so they can compete? ms. reed: absolutely, sir. thank you. as i mentioned in my opening statement, if we are not at the table, we are unilaterally disarmed. and our competitors will take those jobs that should be u.s. jobs through their own eca programs. and i want to be sure, in this time when we have 109 other
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eca's competing against the united states, that we are there. i think that is so important. you i think the export-import bank has a very specific role. it is a tool in the toolbox. the csi ask published an op-ed in the hill earlier this week, and he lays out that in china, they are using their export import bank along with many other tools to be present all our around the world, and we world around the world, and we need to be there, not only are because we need to be for national security reasons. part of the president's economic a -- economic security is national security, so ex-im is part of that, but we want to be there for our workers. i want our workers having these jobs. sen. rounds: you know, i was very pleased with the response you gave to senator toomey.
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i was happy to hear you comment on the fact you will work with us to make certain that some of those things that i have occurred in the past with regard to picking winners and losers would not be in the future. so thank you for that, i appreciate that. mrs. kraninger, first of all, i understand that sometimes we run out of time here. as senators, we try to get a lot of questions in in a short period of time, but sometimes that means we don't give you the opportunity to clearly lay out your thoughts and answer questions. i think that has occurred today. and in fact you have been the object so that individuals here that have disagreements with the administration's policies, and their attempts to enforce border security and so forth, and they can have used you as the object. i would like to give you an opportunity to fully answer any questions you think you may not have had the opportunity to answer, with regard to any of your activity at omb, and the
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responsibilities that you had at omb, recognizing that it may in many cases be simply to provide advice. would you like to share with us a little bit perhaps more fully answer the questions other members were interested in but probably didn't have enough time to allow you to answer? ms. kraninger: thank you, senator. i appreciate that opportunity. the office of management and budget is truly a unique organization because it has such a broad reach into all of the activities across government. it is kind of a microcosm. and my portfolio is the broadest. so the level of engagement i have in any particular issue, or with any particular department or agency, does vary substantially. so the question with respect to the irs rule, i was aware of it happening. i know that my staff reviewed it, but again i did not have a role in developing that. with respect to the response to
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the, again, horrible disasters last fall, because there was clear need for additional resources, the office of management and budget was very engaged. and in addition, with respect to puerto rico, the treasury department had a deep role working with the government, with the oversight board that was established by congress to look at the future of puerto rico, so that is something there have been many meetings on. i would also like to note there are many hard-working men and women across the administration at the state level, in the private and nonprofit sectors that were very engaged in the hurricane response. so it's an honor to support them and look at the resource needs that were brought forward, and to submit to congress the resources that we believe were fully justified and for congress to -- sen. rounds: i would ask the chairman for a little leniency
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after the last questions. you are responsible for over $250 billion in budget resources for seven cabinet departments and 30 other federal agencies, including the treasury department, the housing and urban development, financial regulators, and you also serve as omb's principal policy official for issues related to those departments and the agencies. i just get a sense that somehow with the huge number of items in front of you, how much do you get into the specific details? and do you have the opportunity to come back in and say, wait a minute, i disagree with the policy, i can change it, or do you offer advice? sen. corker: and again, please keep your remarks -- ms. kraninger: it is definitely an opportunity to offer advice. the involvement level really does vary substantially based on the president's priorities, the director's priorities, the agency heads' priority. sen. corker: is your advice
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always taken? ms. kraninger: senator, i wish that it were but no, my advice is not always taken. at the same time, i am also fallible, but i offer my best advice based on the information available. sen. rounds: thank you, thank you mr. chairman. sen. corker: senator schatz. sen. schatz: thank you mr. chairman. i want to follow up on the line of questioning around family separations. i understand you can't characterize the advice you gave, but i'm wondering if we can get some sense of what categories they were in. was it legal advice, was it compliance advice, advice related to execution? i'm not sure i agree with you about deliberative product. i'm not sure i agree with you about the sort of vague assertion about, i don't know if it is privilege you are asserting or personal judgment you are making, or on the advice of counsel.
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maybe we can get into that, but let's set that aside for the moment. it's fair for us to know kind of broadly what you did, not how you advised people are -- or what you implemented, but were you advising on compliance, or you providing legal counsel, were you providing political advice? can you just characterize what you were doing? ms. kraninger: senator, with respect to the office of management and budget's role, which does characterize the director's role, we had myriad meetings talking about the agencies as they were executing the policy. we do have at omb a role for providing perspective on the budgetary resources necessary, any regulatory issues. sen. schatz: but why the third person here? we have a role -- every time we ask you about what you did, you say omb has a role, and it becomes this kind of description of a faraway bureaucrat. it was you.
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and i'm asking you, so that we can establish a little trust. you can just sort of characterize what you talked about, not to describe the contents of what you talked about, but broadly, were you giving legal advice? were you giving political advice? let's start with that. ms. kraninger: senator, if i could respond to the point you are making because it goes to the heart of the matter. my conversation with senator rounds, the reason i'm saying the office of management and budget, i am responsible for my staff. sen. schatz: i get that. ms. kraninger: i'm also providing advice to the director. sen. schatz: i don't have a lot of time. did you give legal advice? ms. kraninger: senator, it's not appropriate for me to give legal advice, really. it is the purview of the office of management and budget to weigh in on regulations, budgetary resources, those kinds of things. sen. schatz: weighing in on regulations? what does that mean? ms. kraninger: so for example anything that involves data collection, it requires notice
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under the privacy act, whether it is a system of records notice, data submission -- sen. schatz: can you please, rather than me playing 20 questions with you, can you please try to characterize your role in this, without running afoul of whatever principal that you articulated earlier, and in as simple and personal terms as we can get to where you can say, this is basically what i did for them. i am not going to tell you how i advised them or get into deliberative product. i understand your position on that, but can you not characterize anything more than, omb generally does this, and that would apply to this situation too? ms. kraninger: i have said i had no role in setting the policy, and then there have been, there were a number of meetings on immigration and border security policy writ large that i participated in, that i
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supported the director and the deputy director in their participation. and then my staff participated in and then came back and told me. sen. schatz: i don't do hearings so i can put a clip up on youtube. i don't, i don't operate that way. and i am trying to get an answer from you, and i just can't. and it is maddening, because this is not a trivial aspect of your basic qualifications for the job. you are coming in and asserting you are a manager, and you can't characterize anything you are doing as a manager. let me ask you one final question. is your position, which is that that would get into deliberative product, is that on the advice of counsel? ms. kraninger: senator, the documents that were requested in the letter are something i have shared with the appropriate officials, and that includes the office of management and budget
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general counsel. sen. schatz: ok, but did counsel give you advice and tell you not to answer these questions? ms. kraninger: senator, we certainly had a lot of preparation for this hearing and discussion about the right answers. my answers are my own. sen. schatz: did you get legal advice? ms. kraninger: not per se legal advice. i'm not asserting privilege. it's not for me to do that, but i am saying that i want to preserve the deliberative process, and that's an important thing to preserve, similar to conversations that many of you have had or i have had with senators i have worked with. it is important to keep those -- sen. schatz: is that your personal judgment or is that on the basis of advice from either the gc or from the white house? ms. kraninger: senator, it is fair to say that there were discussions in preparation for this process that i did have.
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others weigh in in terms of giving me advice on how to respond, but my responses are my own. sen. schatz: thank you. sen. corker: senator moran. sen. moran: i look forward to working with both of you should you be confirmed in the capacities that you have been nominated to fill. ms. kraninger, i would start with you. i want to let you know how much i appreciate the working relationship that you and i have had in your capacity here on the appropriations committee of the united states senate, as well as your work at the office of management and budget, and to indicate to you that i appreciate the diligence with which you pursued my inquiries and issues i have raised in both of those capacities, the thoughtful and articulate way you communicated with me about responses, and the lack of partisanship in the issues we were dealing with was clearly
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demonstrated to me. and i'm grateful for your professional approach to the way that you conducted your work. at least in the experience i have had with you over the last several years during my time as united states senator. my observation about the hearing today on your nomination reminds me of the first piece of legislation i introduced as a united states senator related to financial services and banking, and that was among other things the belief that this entity should be governed by a board. while there seems to be relish in having the opportunity to question you as a potential director of the consumer financial protection bureau, maybe we would enjoy it if we had three or four or five more opportunities to do so. said somewhat with a smile, we would want to go with through
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with this four more times. but the point i would make is, there is a diversity of views in this country and committee about the role of the consumer financial protection bureau. i am of the view that republicans made a significant error at least some in saying we are going to repeal dodd frank and end its reign. and the reaction, the unfortunate reaction to that was many democrats saying, you are not going to touch the issues associated with dodd frank. so we put ourselves in corners that then caused us to be unable to solve problems that currently existed as a result of the passage of dodd frank, the two sides saying, we are going to do this and we are not going to let you do this. it did not allow us to find middle ground in which we could make improvements and changes in dodd frank. one of the changes i have long promoted is a board or a commission that would oversee the consumer financial protection bureau would make sense. i am not going to ask your opinion about this, but i would raise this with my colleagues.
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not only would it allow us to have more input with members of that commission of the consumer financial protection bureau, but it would allow us to avoid the swings that may occur from one administration to the other in the approach that we have had, the approach the cfpb has had in the regulatory world of protecting consumers. i indicate it would be valuable to me and i asked you respond to him this, i would expect if you are confirmed that you will operate in your capacity, if confirmed, in a very transparent and open way so that members of congress have a better opportunity to influence, to make points to you than i sometimes felt i had with one of your predecessors in his administration, his directorship of the bureau. and i would also make the point that those who are being regulated could use greater
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transparency because i think in too many instances of rulemaking wasn't accomplished, and the rules were unknown and what the rules of the road became known only once there was an enforcement action. and so i would give you the opportunity to confirm to me first of all how you would operate in a transparent way and secondly if you have thoughts about how we make certain those who you are regulating know what the regulations are, before they suffer the enforcement action that often resulted in a fine? ms. kraninger: absolutely, senator. thank you so much for your comments and your perspective on this. i completely agree that the bureau, it is a priority for the bureau to be transparent and accountable, that i am committed to working with members of both sides of the aisle in congress to move the bureau forward in that kind of manner. and in terms of the so-called regulation by enforcement that
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many have been concerned about in terms of the prior approach to the bureau, i completely agree that it is critical to have clear rules so that lenders and creditors and the consumers themselves know what the rules are, and that they are not somehow told after the fact that they broke a role they weren't -- rule they weren't even aware of, or that it had somehow changed without any notice or proper comment process without the understanding. so i completely agree that is not appropriate and something i would not engage in. sen. moran: i appreciate your response. and ms. reed, i have run out of time. i would tell you i look forward to working with you. i have been on the banking committee long enough to remember the days in which you would have been a controversial nominee, and i'm glad to see that ex-im is back in a position where we can move forward and protect the global economy and in united states businesses, and
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more importantly those who work for united states businesses. thank you, ma'am. sen. corker: senator cortez masto. sen. cortez masto: thank you. welcome. congratulations on both your nominations, and thank you to both of you for visiting with me in answering my questions. welcome to your family as well. ms. kraninger, i'm going to start with you. these are some of the questions that we had together when you were willing to meet with me, but let me just start with this. i have heard you say time and again in response to all of my colleagues' questioning, your intent is to make sure the bureau is transparent and accountable. but my concern is, based on the questionings and the answers you have given today, we can't even get you to be transparent and accountable about the work you are doing at the omb, the current job that you have that is funded by taxpayer dollars.
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that should be transparent to the public. so i have concerns that if you can't even tell us what you are doing on a day to day basis, how can we trust that you are going to carry that over to the cfpb? but let me follow up with this. mick mulvaney said regulators and attorneys general should play an active role in regulating the banking industry. however as a former attorney general, i know that ag's can't be the only cops on the beat. the cfpb has been vital in exposing fraud and holding those companies accountable. they are the first stop in protecting consumers. that is your role as well, from my understanding from the statutes i read and your statements today. let me give you an example where the cfpb was instrumental for us. wells fargo, as you well know, their actions affected a 3.5
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million people nationwide, including 121,000 in nevada alone. after an investigation by the cfpb, wells fargo paid a $500 million penalty. can you enumerate the powers that the cfpb has that state ag's or state regulators do not? ms. kraninger: senator, as we discussed in your office, i appreciate your perspective and experience in this area. the partnership with the state regulators is essential to the point that you noted. the states have been engaged. senator: why do you believe it is essential? ms. kraninger: the law stipulates that and that is important, though. they existed prior to the bureau and were engaged in this activity prior to the bureau's existence and the statute calls out that important coordination
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rule weather is with enforcement -- senator: as somebody that relied on the cfpb because in the state of nevada, the regulateors wnth -- regulators weren't there when the crashes were there. nobody stopped it and nobody worked to prevent it. but when the cfpb was created, they were the national watchdog to work with the attorney generals and they have a "national review" and it is key to what happens across this country when we are looking to consumer financial protections to work with the states. let me ask you this. without a strong federal regulator, how do you think states will put together patterns of wrongdoing across the country? ms. kraninger: i'm committed to carrying out the responsibilities of the bureau under the law which includes working with the states to look for those kinds of things and work with them on enforcement matters and give them that
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national perspective. we talked about the information sharing that is vital between the bureau and the states' attorney generals and i will share that information with them to support their efforts and looking for the right opportunity for the euro to step in. senator: outside as serving a partner, rules issued by the cfpb can be ep forced by state a.g.'s. do you support empowering the a.g.'s by issuing rules? ms. kraninger: i believe it is an essential responsibility to engage in the rulemaking activity setting clear rules. yes, senator. senator: every american has a right to a day in court and the justice system work for everyone no matter race, class, creed, where you come from or who you know, have you ever signed a contract with a financial firm
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that included a mandatory financial clause? -- arbitration clause? ms. kraninger: i probably have. senator: did you read the mandatory arbitration clause before you signed it? ms. kraninger: i have read them in the past. senator: you were foregoing your right to sue when you signed the contract? ms. kraninger: i was aware of what the clauses were in the contract. i can't assure you that that was there. senator: do you believe that americans read the fine print and sign away their rights? ms. kraninger: i think it is the bureau and statute is important in understanding that the bureau has a role for looking at those things. senator: do you support the cfpb enforcement rule? ms. kraninger: through the congressional review act to preclude that rule from going forward.
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from that stand point, it's addressed in that manner. senator: do you believe all consumers have a day in court? ms. kraninger: through contract relationships and there are opportunities for consumers to take action including coming to the bureau and submitting their commaints. senator: have you ever investigated a bank, pay day lender or credit company? ms. kraninger: i have supported investigations. in terms of financial crimes that the secret service overseas, there has been some involvement with those institutions. senator: but personally you have never been involved in the prosecution or legal action and formulated a case against a bank. ms. kraninger: no, i have not. >> please be brief.
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senator: thank you both for being here. i do as well have concerns about someone without the experience to lead a consumer financial protection bureau, 1,600 employees, millions of dollars in budget that is looking out for the best interests of consumers when it comes to financial products. i have concerns about what i have heard from you being the right person and with the right experience to lead. ms. reed, i look forward to supporting your nomination. >> senator reed. senator: thank you both for your willingness to serve. i assume you are familiar with the military lending act. if a service member were to go to go to court do you think that choice should be protected? ms. kraninger: yes as long as it
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is provided under the law. senator: the military lending act has been strengthened with new regulations. to close loopholes and to prevent unscrupulous leapeders preying on service members and having in my earlier days been a n executive of a company, i seen it first happened, do you support these rules and will you enforce them to the fullest extent possible? ms. kraninger: i'm fully committed to enforcing the law. senator reed: the rulemaking pointed out that one of the impacts on service members in their military careers is the financial instability by being exploited and that affects the performance. the military lending act, i'm very concerned and involved in.
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it helps our readiness. one of the things that we had to accept was the limit on interest charges to an individual service member is 36%. do you think that is too high given the current market rates which are even for crelt -- credit products which are about 16%? ms. kraninger: the rate varies with what the product is and the risks. i support competition in the marketplace that service members and others have the opportunity to avail themselves of different options in the market based on what their financial needs are. senator reed: we set the rate but top rate it at 36%. but given current rates in the market, roughly 16% for the return on the dow jones, my view
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is i think we should be able to lower those rates, would you be supportive of legislation that would lower those rates? ms. kraninger: senator, i appreciate where you are coming from with the question but it depends on what the product is and the conditions are and terms are. there are various products in are. there are various products in the marketplace when it comes to short dollar lending options that are there. it differs greatly from the credit card products or other products in the market. senator reed: well, i would hope that we could work to lower that interest rate to make it more competitive to what's available in the market for most products regardless of how long the duration. do you remember that omb ever of snickeringes current immigrant family for you.
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and --grant family -- ates at order back of the border? ms. kraninger: senator, i'm not sure that that may have been in public comments by individuals. but i'm not sure. senator reed: have you ever used that? ms. kraninger: recognizing in 2014 that was something that was discussed and the courts ruled on that. it was determined at least in i believe the southern district of california as not a appropriate. i appreciate where you are coming from. senator reed: do you feel it's not appropriate right now? ms. kraninger: these are very difficult issues. the sovereign nation should defend its borders but at the same time there are a lot of circumstances for people around the world. senator reed: do you think separating children from their parents is a way to deter border crossings? ms. kraninger: i don't want to talk about -- senator reed: would you like to be responsive? i'm asking what you feel.
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ms. kraninger: it does go down the road of -- senator reed: your values and your judgment and those things we look for when we evaluate someone who is going to lead the cfpb and you don't want to go down that road. i would suspect you feel that way. do you feel that way? ms. kraninger: i don't believe my personal opinions or feelings on this issue are the appropriate line of discussion. i understand why you're asking. i do believe that there are -- i have been to many places in the world and i served in the peace corps, i understand the country that we have today that is an amazing country where we have many freedoms that others in the world do not and i appreciate this is a place that people would like to enjoy their freedoms. senator reed: you used the term and didn't object to it and feel
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that's an appropriate policy consideration. thank you very much. senator heitkamp: i don't know what it's going to cost me. ms. reed, i want to again encourage the chairman to move this nomination. he knows how diligent we have been working to get the ex-im bank up and running and i appreciate senator toomey's concerns but i don't want to associate myself with the characterizations of the ex-im bank and i encourage the chairman to move enough of these nominees now forward with majority leader mcconnell to get the majority bank up and running. great credentials and the last time you were here are perfect for this job, good luck and get you across the finish line. i have a series of yes or no
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questions. not about morality but about your experience. and i don't want equivocation, just yes or no. have you ever worked at a bank or credit union? ms. kraninger: i have not. senator heitkamp: have you ever had oversight or regulated a bank or credit union? ms. kraninger: no. senator heitkamp: have you ever been responsible for oversight or leadership in supervising pay day lenders? ms. kraninger: i have not. senator heitkamp: have you had experience with credit bureaus, debt collectors and student loan processors? ms. kraninger: in a professional capacity i have not had direct experience. senator heitkamp: have you had any decision making responsibility for enforcing federal, state or federal consumer protection laws?
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ms. kraninger: i have not no experience. senator heitkamp: have you had any experience under the equal opportunity opportunity act, any responsibilities for leadership? ms. kraninger: i have not. i'm certainly familiar with these acts and the responsibilities of the bureau. senator heitkamp: have you worked or follow untiered on matters of consumer protection? ms. kraninger: no, senator, i have not. senator heitkamp: have you worked on financial literacy or financial literacy. ms. kraninger: i have done that. i have some experience in working with individuals on that, particularly in college we did have a program to promote financial literacy. senator heitkamp: what was your involvement in that program? ms. kraninger: working on curriculums in the area. so it is something that is
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important to the roles and responsibilities i would be taking on. senator heitkamp: do you have a phd in economics or finance? ms. kraninger: like many other nominees in these positions, i'm not. senator heitkamp: what classes did you take regarding consumer protection? ms. kraninger: long time ago, so i don't remember every class i took. senator heitkamp: you remember what you did in college relative to financial literacy. ms. kraninger: the administrative procedures act was something i took. i took a class in privacy law and cybersecurity law as a matter of fact. those are all relevant to the discussions we are having today as well as corporations which is required of every individual in the program i took. senator heitkamp: the point i'm trying to make, this is a highly technical job.
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and you know, simply having the skill sets of a law degree and having some familiarity with the operation of the administrative agency's practice act, gets us to a -- i'm not asking you about morality, i'm asking you about your core competencies here for the job you have been nominated for. i think obviously you are highly competent and a trade professional. i just think maybe we ought to have somebody who understands kind of the hurts, who has had experience as senator corker talked about with the crisis has had experience in dealing with and to senator reed's point, it may see irrelevant, but this is a job where people are on the edge where they don't know if they are going to make payroll
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or put food on the table. and we want somebody in that job that not only has core competency but some empathy. i thank you so much and my time's up. >> senator van hollen. senator van hollen: thank both of you for your testimony here today and just to follow up. i understand some of the concerns you expressed about not getting too deeply and advice you offered. i under sfood that part. but now you will be heading up an independent agency, it's an independent agency, is it not? ms. kraninger: it is. senator van hollen: not that you are going to be a line position enforcing the policy from above, you will be playing a key role as the head of an independent agency.
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so i do believe your personal views on a range of issues are important in that context. and i wasn't here for all the questions. i heard senator reed's questions and is it your position you are not going to answer the question about whether or not you personally supported the policy of family separation, separating. what is your personal view on that policy? ms. kraninger: i appreciate greatly the questions you are raising and happy to discuss qualifications and my judgment. i have given my best advice to every person i have worked for in my career and that is important to me as well as keeping that advice and perspective. senator van hollen: the difference here as i said, it's one thing to not share openly advice that you are giving within the administration, but giving the fact that you are now going to head an independent agency where your views and positions will definitely inform a lot of the actions that you
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will take, i think it is troubling that you won't share that information with the committee. let me ask you about the office of fair lending and equal opportunity, because in our state of maryland, like so many other places in the country, we have had a bad history of discrimination in lending in many places. there was a case against wells fargo in baltimore little more than 10 years ago and other cases where it has established it has discriminated against african-americans and people of color. is this a continuing problem that we have to face in this country, fighting discrimination in lending? ms. kraninger: it is unfortunate that discrimination should have no place in society or the markets but it certainly exists. senator van hollen: one of the things that was established when the cfpb was established was the office and one of the first things that the acting director
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mulvaney did he moved the enforcement authorities for fair housing out of that office. would you be willing to put those enforcement authorities back into the office of fair lending and equal opportunity? ms. kraninger: enforcing the fair lending laws is a critical responsibility, whether it happens in the division of supervision or it is in a reconstituted fair lending office is something i can commit to you i will look at and review freshly in talking to the staff that are there and understanding how their responsibilities have changed. looking fresh at the organization. senator van hollen: i think it was rightfully interpreted at the time as weakening the authority. the folks that are paying close attention every day and doing the supervising are in the best position to do the enforcement
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and having the enforcement helps them in terms of getting the attention of the folks that they are overseeing. same with the office of student lending. the administration was planning on taking resources from the department of education to pay the costs of complying with the court order. and i think that we would be better served if we find those resources to meet this court order without robbing another part of the department of education. can you work with us on that as your nomination continues to work its way through the process?
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ms. kraninger: it must be within the department of health and human services. it must be within the health and human services which is not in my purview but happy to take your concerns back. complaint with the court order. i think we better served if we him ands research is to
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him department of education are you familiar with us in determining us on that as your valuation to work its way process?he process ms. kraninger: it must be within the department of health and human services. it must be within the health and human services which is not in my purview but happy to take your concerns back. >> senator jones. senator: i want to follow up on a couple of things. i know director mulvaney and you talked about getting back to the statutory mission of the agency but one of the migs, one of the objectives that consumers be protected from unfair or deceptive practices and from discrimination. for millions and millions of americans that last clause may be the most important,
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particularly people of color. someone can look just like i do, which would be really sad, to be honest with you, have the same credit and same income and same profession and yet another person who has a different skin color would get offered a different financial product. and so i want to ask first do you plan on making fair lending a priority if you are confirmed? ms. kraninger: senator, your point is abhorrent that discrimination exists in society and the margets and i'm committing to enforcing the law to address any of the issues that we find in that area. senator: discrimination today takes a lot of different forms. it's not like some of the old days where you see the white and colored signs on rest rooms.
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it can be more subtle and sometimes it doesn't have the actual intent, but can have the disparity impact on on a group. i would like to get your thought of how you will view cases and whether or not you will use in looking at the broader section of a minority group and whether or not that would come into play and what your -- that is used a lot in a lot of legal cases that i have been involved in over time, because you can't always prove the specific intent. how do you feel about the impact on the use of cfpb cases? ms. kraninger: i appreciate the question and the point you are raising, yes, in many cases, this could be a more subtle action. i think there are a few things that the bureau can do in this area, certainly working through the process, this is something that can be looked at. at the same time with respect to court cases and enforcement actions and the impacts are very
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complicated and it is a very challenging area. so i can commit to you that should i be con filmed in this position when i get to the bureau, i will have a detailed conversation with the staff on this area to understand what positions the bureau has taken in the past on this issue and what the status of litigation is on the issue and take the appropriate actions to ensure we are promoting lending. senator: we are not going to give a loan because they are plaque or asian but affecting a small minority of americans. ms. kraninger: i will commit to you in establishing clear rules to make sure they are enforced and look at this issue.
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senator: i'm going to take it as a yes. but i would like to go back to a little bit senator tester, i was here for his comments and i was a little bit -- and we talked about this the other day. i appreciate you coming in and talking about pay day lending rules. and i guess what concerns me a little bit in our meeting and then with senator tester, you talked about respect for the process and rulemaking process. but the pay day lending rule went through a five-year process and went through a lot of comments. i mean, thousands, if not tens of thousands or millions.
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it got finalized and then director mulvaney decided to walk that back and start that process all over again. so i'm a little bit concerned that we are respecting a process that hasn't been respected before. and i would like for you to comment on that and what you are doing, because it is a huge issue in my state. i mean 250,000 people took out two million loans, an average an go eighth of these loans per person and it is a huge process and hurting these people a lot. i would like to get clarity when you are talking about respecting a process that has already gone on. what do you mean with the consumer lending right now? ms. kraninger: i appreciate your time and i recognize the
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difficult issue in many states. they have taken different actions for a myriad of reasons, whether it's authority or willingness on pay day lending. what i mean in terms of the process is that the acting director has announced reconsideration of that rule and from that standpoint, the basis for that reconsideration and what aspects are being reconsidered is not something that i am not privy to or not discussed publicly. that is the process undergoing right now and under active consideration. >> senator donnelly. senator donnelly: i'm a strong supporter of the ex-im bank. it helps us compete in our global marketplace. the ex-im bank doesn't cost taxpayers a dime and has returned billions to the treasury and protects countless jobs across the country. in indiana since 2012, ex-im
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bank has helped 84 hoosier companies to export more than $2 billion in goods and services. in 2015, i worked with senator heitkamp to end the six-month shutdown of the bank. unfortunately ex-im is still not running at full steam because it lacks board membership to obtain a quorum and approve transactions over $10 million. there is a backlog of $42 billion in deals representing 250,000 jobs stuck in a pipeline waiting approval. we need a fully operating ex-im bank more than ever. while our international competitors have increased their efforts. there is 85 foreign export credit agencies aggressively supporting their own domestic industries like china, brazil
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and independent and doubling down. they are damaging the foreign markets that our hoosier farmers have spent decades. and now trade policy is making it worse. to grow and maintain a strong economy, we need to send american goods, indiana goods all over the world. our businesses deserve a level-playing field. policy makers should make it easier, not harder, for businesses to do that. ms. reed, these are fairly simple questions. are countries investing in their own credit agencies in order to boost their domestic agencies? ms. reed: yes. senator donnelly: their competitors are increasing.
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ex-im bank helps manufacturers and farmers develop foreign markets for u.s. goods and services. ms. reed: absolutely. senator donnelly: this committee approved her nomination for vice president. now she has been nominated as president of ex-im. i encounseling that confirmation as soon as possible to bring fresh leadership. hopefully her confirmation will be followed by fellow board nominees and allow the ex-im bank to return to full strength creating more american jobs again. strong ex-im bank will create jobs and returns money to our taxpayers. two months ago, the cfpb announced it would allow the student loan office and members of the jury it into another office. i don't know of an area where
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young people in my state incurred more debt than in the area of student loans. for many of them, it has prevented them from being able to buy homes, buy cars and fully participate in our country and economy. a recent report finds 60% of indiana's college graduates leave with student loan debt. i saw your answer to mr. van hollen before about reinstating the student loan office. i'm a strong supporter of that. you are going to review that. i would urge you very much to do that. what are your plans for protecting student borrowers? ms. kraninger: this is an important issue and certainly under the law the bureau was provided the responsibility for looking at private student loans. senator donnelly: now it has closed down the office, what are
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your plans? you said you would look at reopening it. what specific plans do you have? ms. kraninger: there is a position of the private student loans ombudsman and a position still exists and first order of issue is sit down with the individuals in that office to understand the activities they have ongoing. senator donnelly: you have young people paying incredibly high interest rates who look and feel they may never get out from this burden they have and never be able to buy a home or a car.
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and that's an extraordinarily discouraging situation for people across our country. one other question i want to ask, mr. mulvaney once called the cfpb a joke. do you share his sentiments? ms. kraninger: director mulvaney has responded to those comments. i support the bureau as it was established in congress and the roles and responsibilities. senator donnelly: did you think it was a sad, sick joke the way it was being run? ms. kraninger: i support the bureau's mission and look forward to being confirmed. senator donnelly: do you like peanut butter, do you think it was a sad, sick joke? ms. kraninger: those are not words that i would use and the director has responded to those comments since.
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>> we have had a request by several members of the committee for a second round. i will agree to that, although we will hold it to five minutes. the senators have been taking a little bit of liberty. senator donnelly: i did not take much liberty. >> i will accept your comments. so we will do that. and senator brown, i turn to you. senator brown: you had to disclose any campaign contributions from the last eight years above $500. ms. kraninger: i believe that's correct. senator brown: you didn't make a $500 donation but two separate $250. you didn't disclose that, correct? ms. kraninger: i believe -- i
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did disclose what was requested by the committee, senator. i don't remember the exact facts. to note it was about $500. senator brown: i don't believe what you just said is true. let me ask again, you didn't disclose the contributions to mitt romney's campaign. so two contributions you didn't think that qualified for what you should disclose. ms. kraninger: there was a time period. i don't have the documents in front of me. if you have them. senator brown: we do. you made contributions to kasich and jeb bush, do you know and you know they should have been disclosed or under law. did you make any donations to the 2016 campaign? ms. kraninger: those are the only two i did make. senator brown: you didn't answer my question whether you would appeal the 9/11 scammer case. you said you would implement the
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law. who decides whether to appeal or not. ms. kraninger: i'm not familiar where that case is. senator brown: who decides whether to appeal a case or not at the cfpb. ms. kraninger: the director has the authority to determine these things. if a case is headed to the supreme court, the bureau does not have independent representation authority. senator brown: do you plan to defend the agency in this case? ms. kraninger: without the benefit of being inside the bureau to understand the litigation and strategy that was taken that is a very challenging question to answer and i don't want to pre-judge the
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opportunity to talk with the general counsel and understand the conversations they may have had with the department of justice given the facts that the bureau cannot represent itself is something that i would certainly undertake should i be confirmed. senator brown: not long ago, director mulvaney teamed up with a group of pay day lenders to sue the agency that he claimed to be leading and to delay its pay day rule. you are a lawyer. do you think agencies should sue themselves to prevent consumer protections from being implemented? ms. kraninger: the responsibility is clear in the statute for the director to carry out the law and that is what i would pledge to do and i pledge to work with all of you in carrying out those responsibilities. senator brown: do you think it's -- an agency chief to sue itself? ms. kraninger: i'm not familiar with the details or internal -- senator brown: i think you must know, it's not a question of internal deliberations, do you think it's proper for the head of an agency to team up with outside interests whether you are pro pay day lenders because of his travels and his political contributions, but whether or not you are close to or supportive of an interest group, do you think it's proper for an
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agency to join outside groups, an agency chief to sue that agency? ms. kraninger: being unfamiliar with the specific facts, i don't know the basis. but i will tell you it would certainly be unusual. senator brown: i appreciate your agility. that was not my question on commenting on that case, do you think it's proper for an agency chief to join -- you're a lawyer and i'm not, but is it proper for an agency chief to join an outside interest group to sue the agency itself? ms. kraninger: it is unusual. senator brown: we have established it is unusual. we know that. you don't know the specifics and you don't know the specifics of the case. is it proper for an agency chief to sue its own agency with or on behalf of an interest group that has business in front of that agency? ms. kraninger: i can tell you that i come to this position without any particular special interests -- ency chief to join an outside interest
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group to sue the agency itself? ms. kraninger: it is certainly unusual. rep. brown: thank you. i know it is unusual. we know that. you do not know the specifics. at least, you say you don't know the specifics. that is fine, too. is it proper for an agency chief to see with an agency on behalf of an interest group that has business in front of that agency? ms. kraninger: senator, i can tell you that i come to this position without any particular special interest. rep. brown: can't you just say it's not proper? or yes it is proper. or i will do it? ms. kraninger: senator, it is unusual. i am sure there are reasons that i am not privy to, but again, i certainly pledged that i will carry out the duties and responsibilities of this position to the best of my ability. >> senator warren? >> thank you, mr. chairman.
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so you do not have any experience in consumer finance orcymer finance, no -- anything. you have worked on president trump 2019 fiscal year budget request for the cfpb. and the trump administration has claiming that this gives some insight into how you would run the agency. an are you qualified question that according to the trump administration should be directly in your area of suppose it expertise. now, let's go through it. the cfpb sets its own budget, so the budget you propose had no actual effect on the agency. is that right? ms. kraninger: that is correct. rep. warren: on top of that, the budget you set is a single topline number. it does not rate down how the cfpb would adjust its spending to reach that number, is that right? ms. kraninger: that is correct. rep. warren: you are the budget
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effort. let's talk about how the cfpb would meet the budget that you drafted. your budget for 2019 calls for a 23% cut relative to the cfpb's proposed 2019 budget. that is about $147 million cut. cfpb's number one expense representing more than half of its total cost is compensation and benefits of its employees. other than the director and the new political appointees that mick mulvaney brought to the agency, every other cfpb employee is a civil servant. in order to achieve the 23% cut you have proposed, would you fire civil servants? ms. kraninger: first, let me clarify that it is the president budget request and not mine. rep. warren: can we just do this? helde going to be tight on time. of kraninger: in fy 17, 53% the funds that were utilized under direct accords were for
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salaries and benefits of people. rep. warren: can you give me a yes or no? will you fire civil servants? ms. kraninger: there are laws in place to protect silver servants. the answer is 53% with salaries and benefits -- rep. warren: will you fire civil servants? mr. chairman, i will ask for a time -- extra time if we keep playing this game. that is not hard. this is your area of expertise. your budget that you put forward. do you contemplate firing civil servants to meet your $147 million cut? yes/no? ms. kraninger: it is not my budget. it is the president's budget. rep. warren: does the president's budget as drawn up by you and offered by your expertise for this job contemplate firing civil-service employees? ms. kraninger: the proposal to congress is what the president's budget reflects, and it was a discussion on the debt in
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deficit situation. words,rren: in other you're just playing dodge ball here. you will not fire civil servants, then let's see how you will try to make this up. let me try another one. the next largest set of expenditures for outside contracts goes to maintaining the agency's cyber security. do you plan on reducing cyber security? ms. kraninger: 31% of the funds in fy 17 was for outside contractor services, that certainly is a big part -- rep. warren: can you stop playing dodgeball? do you plan to cut expenditures? the next busiest investment -- biggest investment in several security. do you plan to cut cyber security? ms. kraninger: the other service line -- rep. warren: it is the next biggest line. ms. kraninger: cyber security and i.t. investment are important to the organization -- rep. warren: is that a no? ms. kraninger: it is something
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that needs to be examined. every line item does. rep. warren: will it be cut or not cut? ms. kraninger: without going through my my line -- rep. warren: so you might cut cyber security. ok. the next largest expenses travel costs. as i seem you know, most of the agencies travel cost is because the agency sends examiners to visit the financial companies that they supervise so they can actually make sure they are complying with the law. that supervision is required by dodd frank. would you cut back on examinations and supervision in order to achieve the 23% cut you need to achieve? ms. kraninger: looking at travel i think is a legitimate consideration. rep. warren: recognizing that this is travel to go enforce the law at the banks. you would cut that back? ms. kraninger: looking at the travel and the efficient distribution of staff is certainly something that is appropriate. rep. warren: so you're thinking about cutting staff so we don't
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send as many people out to enforce? even if you got travel costs to zero, you would not be any place close to what you put forward as the proposed budget, so where is the 147 billion dollars, the 23% cut, coming from? can you just tell me where the areas are that you plan to cut that will get us there? >> please keep your response brief. ms. kraninger: senator, this was the president's budget request. i pledged that i will look at every line item within this -- rep. warren: no, you do not get to dance away from this by saying it is the president's budget. the president has offered you office saying this is your expertise. your one piece of consumer protection and for tees is you put together a budget for the cfpb. so what i want to know is you proposed a 23% cut, $147 million. give me some ideas about how you actually would make a $147
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million cut at that agency. >> please respond briefly. ms. kraninger: i believe there are opportunities for efficiency and consideration and it may involve spending funds on other activities that are underfunded by pledge i will look at, carefully, the budget of the bureau. rep. warren: let's be clear. i want to be clear. she has dodged around this for this entire question, line of questions. the one thing you have done in your career that is related to the cfpb is to come up with a budget number, and the budget number simply does not add up. you cannot explain how that agency can do its work if it has a 23% budget cut that you put together as a trump administration offers as your expertise. the only thing you can come up with is maybe he will cut travel, which means there will be less enforcement. i know that will make england is happy, payday lenders happy, but it does not reflect any
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knowledge of the cfpb or any centralnt to the cfpb's mission of trying to protect consumers and level the playing field. >> sen. tillis. senator tillis: a lot of people have tried to boil complex subjects down into simple yes/answers. there is only one i heard where i felt like we deserved a yes/no answer, do you or do you not like peanut butter? ms. kraninger: i like peanut butter, thank you. rep. tillis: outside of that question, i think it is absurd to say that this is nothing more chan the sort of got tactics some members used to try and, well, support their narrative. i will get on. how big is the cfpb, how many employees? ms. kraninger: eckstein hundred employees. rep. tillis: do you think -- 1600 employees. rep. tillis: do you think
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you have people who have worked for credit agencies, business lending, any number of financial field? ms. kraninger: yes, senator. they have a wide variety of skill sets and expertise being brought to bear. rep. tillis: would you see yourself ending up in the morning, coming in early, and writing out the policies or directing the affairs of the agencies? ms. kraninger: senator, it is the latter, directing the priorities and expecting the staff to put forward the policies. rep. tillis: how big was the scope of your portfolio at omb with respect to the whole of the administration? ms. kraninger: roughly 1/5 of the total government, to under $50 billion in resources, 37 agencies. rep. tillis: you have a lot of time in your day. i was in research and development early in my career in boston and i was a product manager. when we were formulating a technology policy, i would bring r&d, i would bring
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manufacturing, finance, marketing together. it was the scientists that worked under my matrix of supervision that came up with the ideas. it was other organizations to figure out the complexities, the pipes, all you needed to do to actually pay for it, administer it. would you consider that to be at all to your role in office of budget management? not formulating policy, but and limiting it? ms. kraninger: yes, senator, that is the case. with a wide variety of staff and topics. rep. tillis: i find it remarkable that anybody would suggest that you are actively engaged with the formulation of policy on child separations. you have certain -- is you take a look at child separations, it is something i know a lot about. i love the passion about solving the child's aversion politics -- separation politics. i will be talking about it on
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the floor later today. because i sometimes wonder whether or not people really want to solve this problem or if they want to use it to come here and pretend that only the president can solve the problem. it is the congress that can solve that problem. and once we pass that bill, in your current capacity, we would expect you to figure out how to implement the policy. to seerustrating to me the passion expressed about certain issues in this committee and an absolute cell chambervacuum in the that can do something about it. but can you tell me just a little bit more about, again, on a day-to-day basis, to what extent in your entire tenure in office at omb, that you have ever been actively engaged in crafting the policy choices? ms. kraninger: senator, that is a very fair question. in terms of what generally comes before the office of management
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and budget, it is what the agencies are formulating. they put forward what their leadership would like to pursue, or we received direction from the president about activities they should undertake, and they are formulating the manner in how to address what the president's priorities are and what he asks of them, and we are supporting the effortyt. first off, for the family members, thank you all for being here. these hearings can be somewhat troubling, but you should never forget the fact that these two nominees have had very disendorsed careers and are very deserving of the nomination, and you should be proud of it. i want to say that i hope the focus on child separations that i saw in this room translate to people who want to solve the problem. we are now what i consider to be
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minor differences. if they truly want to keep families together, congress needs to fix this problem. practice the legislation. you were trying to determine how to implement the policy. we should put a mirror on the members of the u.s. senate and say why aren't you axing this problem? thank you, -- fixing this problem? thank you. >> for senators wishing to submit questions for the record, this questions are due in one week, on tuesday, july 24. we asked both nominees to respond to these questions by tuesday, july 31. so we can vote that week on the nominations. ebola for joining the committee today. think everyonee for joining the committee today. sometimes these hearings get intense. we appreciate you willing to put yourself forward for service to the country. with that, this hearing is adjourned. gavel bangs]
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>> the c-span bus made a long journey to alaska, capital of the 49th state. this weekend on book tv in american history tv, we show you the state's natural beauty and we delve into alaska's unique history in literary culture. >> here's a look at our live co


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