On February 12, the Trump administration announced Jonathan McKernan as the Director of the CFPB and Jonathan Gould as the Comptroller of the Currency. McKernan and Gould will replace Acting Directors Russell Vought and Rodney Hood, who were appointed to head the CFPB and the OCC, respectively, on an interim basis.
McKernan, a lawyer, spent several years in private practice before joining the staff of Senator Bob Corker, and then held other policy advisor roles at the Treasury Department and the Federal Housing Finance Agency before becoming Counsel to Senator Pat Toomey on the Senate Banking Committee.
President Biden nominated McKernan to serve as a Republican member on the FDIC’s Board in 2022. McKernan has made a number of speeches as FDIC Director which may signal his potential approach as CFPB Director. Among his positions, he stated that regulators “should avoid the temptation to pile on yet more prescriptive regulation or otherwise push responsible risk taking out of the banking system.” He has also opposed the FDIC’s final rule implementing the Community Reinvestment Act, criticizing the length and complexity of the rule, as well as whether regulators had the authority to prescribe certain aspects of the rule.
Gould was previously chief legal officer at the crypto firm Bitfury and, before that, was senior deputy comptroller and chief counsel at the OCC. His appointment is in line with the Trump administration’s crypto friendly approach.
Putting It Into Practice: Changes at the Bureau are happening by the hour. Acting Director Vought expanded an existing stop-work order at the CFPB, suspending all supervision and examination activities in addition to rulemaking and enforcement. The agency’s next scheduled funding request was canceled, with Vought citing that its current funding amount was sufficient. CFPB headquarters have also been closed and Vought terminated dozens of employees who were still in their probationary period. The continued broadsides against the CFPB means that McKernan will inherit a severely weakened Bureau. With rulemaking, enforcement, and supervision at the Bureau halted, providers of consumer financial products and services should closely monitor the activity of state-level regulators, who may become more active in response to a weakened CFPB (previously discussed here).