It never made much sense.
Acting Consumer Financial Protection Bureau Director Mick Mulvaney’s quest to rename his agency the Bureau of Consumer Financial Protection smacked of the kind of government overreach he frequently decried. The ostensible reason— that it was the real name of the agency given that the Dodd-Frank Act mentioned it that way more times than it did as CFPB — rang hollow. Many critics suspected that Mulvaney was instead purposely causing brand confusion, hobbling a relatively new agency he once called a “sad, sick joke.”
But in an unexpected twist, Mulvaney’s successor — Kathy Kraninger, who until last week served as Mulvaney’s right hand at the Office of Management and Budget — has scrapped her ex-boss’ plan. In an email to staff, she said the agency would continue to use the BCFP seal and name for legal purposes, but CFPB for everything else. Kraninger closes the email by pointedly referring to the agency as CFPB.
So what are we to make of all this? On the one hand, it feels like a small issue, an aborted attempt to change the name of an agency. One could reasonably ask if it matters at all.
But abandoning the name change is actually a savvy move by Kraninger, one that quickly asserts her independence from Mulvaney and bodes well for her tenure overall.
Kraninger is a blank slate when it comes to financial services and consumer protection. She came to the CFPB job with no previous experience in either area, and was widely assumed to be the hand-picked successor of Mulvaney himself (Mulvaney has said he had no role in choosing her). As a result, Democrats and consumer groups have portrayed Kraninger as Mulvaney Part II.
Kraninger’s decision— her first official act as CFPB director — suggests the reality is not that simple.
Let’s be clear — the name change was Mulvaney’s idea and his alone. The industry wasn’t demanding it and there were fears it could cost banks and other firms hundreds of millions of dollars. The move was also controversial. It quickly became partisan, with many Republicans referring to the agency as BCFP while Democrats continued to call it the CFPB. Sen. Elizabeth Warren, D-Mass., even asked the agency’s inspector general to probe the name change, including the rationale for it and its impact.
By scuttling the issue within a week of taking office, Kraninger is accomplishing several things at once. For one, she’s rejected Mulvaney’s pet project, putting distance between herself and her predecessor early on. She’s making it clear she’s not there to rubber stamp all his decisions.
For another, she’s also effectively making the agency a little bit more bipartisan. If a Democrat changed the name back to CFPB, Republicans might hold dear to BCFP just on general principle. But if a Trump-appointed director does so, there’s little reason for the GOP to carry on. America is divided enough without adding the acronym of an obscure agency into the mix.
"The name change is a lay-up,” said Greg Lisa, a partner at Hogan Lovells, and a former CFPB enforcement attorney. “Kraninger can say she is putting consumers first, that this is [her] own agency, and it avoids unnecessary costs on businesses, and gives a nod to the current CFPB staff.”
Finally — and arguably most importantly — she’s also sending a signal about what kind of leader she intends to be. Within the banking industry, the CFPB’s internal resistance to Mick Mulvaney was seen as proof that it is staffed by a bunch of left-wing Democrats. But the truth was more nuanced than that. Mulvaney came in as an outspoken critic of the CFPB, one who had repeatedly called for its dissolution. He appointed a dozen or so political appointees to shadow staff. It’s understandable, then, that employees distrusted Mulvaney and his motives.
In contrast, other Trump-appointed heads, like Jelena McWilliams at the Federal Deposit Insurance Corp. and Joseph Otting at the Office of the Comptroller of the Currency, came in with no ill-will toward the agencies they now control and without many (or any) political appointees. As a result, both McWilliams and Otting are accepted by the staff at those respective agencies in a way Mulvaney never was.
That’s partly why Kraninger’s decision is so important. In a small but critical way, she’s put herself more in line with her colleagues heading the other bank regulators and signaled she’d rather make a decision in the best interests of the agency rather than tilt at windmills like her predecessor.
Bankshot is American Banker's column to provide real-time analysis and insight. Kate Berry contributed to this article.
