Jonathan McKernan, the White House’s nominee to lead the Consumer Financial Protection Bureau, pledged Thursday to rein in the bureau and bring its “past excesses” to an end.

During his nomination hearing before the Senate Banking Committee, McKernan faced pointed questions from Democrats related to his support of consumer protection laws and initiatives, and his views on allowing Elon Musk access to information on competitors via the CFPB. 

Given recent turmoil at the CFPB and the White House’s negative commentary around the agency, Democrats said McKernan may be signing up for a tough job and taking on an “unenviable” position. 

“You do not appear to have much presidential support, or [Office of Management and Budget] support,” Sen. Jack Reed, D-RI, told McKernan. “I have this sinking feeling that you’re departing Liverpool on the Titanic. So good luck.” 

“It kind of feels like you’ve been lined up to be the No. 1 horse at the glue factory,” Sen. Elizabeth Warren, D-MA, the committee’s ranking member, said to McKernan.

McKernan’s nomination came amid a tumultuous month at the CFPB. The bureau, infiltrated by the Department of Government Efficiency, has seen a change in leadership, a stop-work order and headquarters closure, the resignation of enforcement and supervision chiefs, and job cuts. The CFPB is currently led by Acting Director Russ Vought, who is also OMB director.

All of that has led observers to wonder whether the Trump administration aims to “delete” the CFPB, as billionaire and Trump adviser Musk has suggested. But in a court filing this week, the Trump administration said it doesn’t intend to shutter the bureau, pointing to McKernan’s nomination as evidence to support that. Vought has told the Federal Reserve new CFPB leadership “will run a substantially more streamlined and efficient bureau[.]”

Questioned by Democrats on the fate of the agency he’s being tasked to lead, McKernan pointed to the statements in that court filing, saying the administration has indicated there will be a CFPB, and he intends to follow the law.

“The north star here is you’ve got to follow the law fully and faithfully execute the statute,” McKernan said in response to questioning from Warren. “I take that very seriously, as a former congressional staffer, I’m an Article 1 guy, I’m going to make sure the CFPB performs each of its statutorily performed functions.”  

“You follow the law, then we’ll all be good,” Warren replied.

‘Who’s going to be in charge here?’

Nearly two hours into the hearing, Sen. Tina Smith, D-MN, noted reports the CFPB has moved to drop its lawsuit against Capital One. The bureau had filed suit against the bank in January, accusing Capital One of misleading consumers about a savings account product and working to keep them in the dark. That appeared to run counter to what McKernan had just told her Wednesday, about reviewing the CFPB’s pending litigation if confirmed.

“Who’s going to be in charge here?” Smith asked him. “It’s not clear to me, because at the moment that we’re sitting here talking about you taking on this responsibility, Russell Vought or others are dismissing lawsuits that you just told me you were going to have the opportunity to review.” 

Warren told McKernan that the announcement’s timing seemed “designed to embarrass you and to show exactly who is in charge of this agency right now: Elon Musk and his little band of hackers.”

McKernan told senators he believes his record “speaks to my willingness to assert my point of view.”

During his opening statement Thursday, McKernan said he welcomes the “opportunity to advance the President’s pro-growth agenda and his work to enhance excellence and accountability in government.” 

McKernan’s nomination to lead the CFPB came a day after he vacated his seat on the Federal Deposit Insurance Corp. board, which he held for two years. If confirmed, McKernan would regain a seat on the FDIC board. 

Prior to the FDIC, McKernan served as a counsel to former Sen. Pat Toomey, R-PA, on the Senate Banking Committee staff, a senior counsel at the Federal Housing Finance Agency, policy adviser at the Treasury Department and to former Sen. Bob Corker, R-TN, and a short stint at the CFPB – focusing on the mortgage market in all of those roles, he said.

Consumer protection is “critical” and “we must have a financial regulatory system that works for everyday Americans,” he said. However, “the CFPB has gotten in the way of its own mission.”

The bureau’s actions and regulation-by-enforcement agenda have become politicized and exceeded the scope of its statutory authority, he charged. The CFPB has also left consumers with fewer choices and higher prices “when it has failed to strike an appropriate balance between costs and benefits in prescribing new regulations,” he asserted.

“Even if you don’t agree with that view, it’s clear that the CFPB suffers from a crisis of legitimacy,” he told the committee. “This must be corrected if the CFPB is to reliably do what it’s supposed to do — look out for the American consumer.” That means the CFPB needs to be accountable to elected officials and “past excesses” must end, he said.

“Under my watch, the CFPB will take all steps necessary to implement and enforce the federal consumer financial laws and perform each of its other statutorily assigned functions,” McKernan told the Senate Banking Committee during a nomination hearing Thursday. “But the CFPB will do this by centering its regulation on real risks to consumers and by focusing its enforcement on bad actors.” 

McKernan’s priorities

If confirmed, his first priorities include refocusing the CFPB’s mission, right-sizing the agency and reinstating accountability, McKernan told senators Thursday.

Democratic senators wanted McKernan to ensure the CFPB maintains its consumer watchdog stance by enforcing military lending laws or restoring an office focused on elder fraud. 

Republican senators sought to highlight McKernan’s experience as well as get his agreement that Vought is acting within his legal bounds in requesting no CFPB funding from the Federal Reserve for the coming quarter.  

Democrats also tried to pin him down on the merits of returning billions of dollars to wronged consumers, but McKernan argued “that’s like evaluating an official based on the number of fouls he calls during the game.” 

“I don’t think we should evaluate the success of the CFPB based on dollar numbers or enforcement count,” he said. “We should evaluate the CFPB director based on whether we have fair, transparent, competitive markets.” 

McKernan blasted the CFPB’s recent record, pointing to one court’s ruling that the CFPB had “violated bedrock principles of due process” in an instance where the bureau sought to apply a new rule to a mortgage servicer retroactively.

“This is what’s got to come to an end at the CFPB,” he said.

Still, McKernan commended former CFPB Director Rohit Chopra on his work to draw attention to issues around data collection and data aggregators and brokers, noting associated privacy and national security concerns. It’s an important issue for lawmakers and regulators to continue focusing on, McKernan added.