President Trump plans to abolish his appointment to Jonathan McKernan to direct the Consumer Financial Protection Office, leaving the agency in the hands of a temporary director while Mr. Trump officials work to empty the agency.
The Treasury Department said on Friday that the president rather planned to appoint Mr. McKernan to serve as a subsecretary of the department in domestic finance. Mr. McKernan was appointed in February to be director of the Consumer Office and testified this month during a confirmation hearing before the Senate Banking Committee. His appointment was approved by the Committee but had not yet been taken up by the complete Senate.
A representative of the White House said that the president intended to cancel this appointment and that Mr. McKernan fulfills the role of the Treasury.
Russell T. Vought, director of the White House budget office, has been the acting director of the consumer office since early February. He frozen most of the agency’s operations and sought to dismiss 90% of its staff – a move from the federal courts temporarily blocked. A panel of three judges from the American Court of Appeal for the Columbia district circuit should hear oral arguments for this case next week.
Also Friday, the Consumer Bureau published an official opinion of its intention to withdraw more than 60 policy declarations and orientation documents. This would serve the public interest by reducing requests for compliance with the companies that the office regulates, said Vought in the advice.
Banking trade groups praised the purge of directives, while consumer defenders responded with alarm.
Better Markets, a defense group for defenders who promotes surveillance of the financial sector, said that Mr. Vought’s decision was probably a first step in dismantling the agency’s consumer complaints, which helps people pursue complaints against companies on financial disputes. Consumers have collected hundreds of millions of dollars in reimbursements and other alternatives in response to complaints filed with the consumer office.
“This is a calculated demolition of the tools on which consumers and defenders count to protect themselves from financial violence,” said Brady Williams, a lawyer for better markets.
The American Bankers Association said she was happy to see the agency radically bringing her advice. These documents were intended to help companies understand how the agency interpreted various laws, but the consumer office often used them as a form of furtive regulations, said the banking group.
“This improper use of the advice creates unnecessary confusion for regulated entities,” said Rob Nichols, general manager of the group. “We hope that today’s action marks a turning point.”
