I came to the realization about midway through yesterday’s Senate Banking Committee hearing vetting four nominees for posts in the federal government, including Jonathan McKernan to be the next director of the Consumer Financial Protection Bureau that the best use of the hearing was not to hear the viewpoints and objectives of the nominees — because they largely refused to say anything — but to serve as a drinking game. Next time you’re watching one of these hearings, take a shot every time someone says that he or she is going to “follow the statute” or any time that a pre-hearing meeting was referenced — that is probably the only way you’re going to enjoy what you’re watching.
The big picture: McKernan was one of four nominees before the committee yesterday and the real objective wasn’t necessarily to gain insights from any of them about how they would do their jobs if confirmed. The real objective is the soundbite or video clip of the committee members asking what they deem to be simple yes or no questions and getting non-answers from the nominees so that the committee members can show how they are doing their part to protect their constituents. It’s nothing more than political theater.
Democrats on the committee used their five minutes to grill McKernan — he was the overwhelming recipient of most of the committee’s attention during the two-hour hearing — as they sought to use the developments of the past month as fodder for what the CFPB will look like under McKernan’s leadership, especially the efforts to weaken or dismantle the agency under President Trump and his advisor Elon Musk. McKernan, a former FDIC board member, assured lawmakers that he would uphold the law (“follow the statute”) and execute the CFPB’s statutory functions faithfully. He stressed his commitment to addressing what he called the agency’s “crisis of legitimacy,” particularly its past overreach and the need to refocus its efforts on consumer protection while streamlining operations.
Why it matters: However, Democrats, led by Sen. Elizabeth Warren [D-Mass.], expressed concerns that McKernan would not be fully in control of the agency. This suspicion was fueled by the CFPB’s recent actions, including the dismissal of several high-profile lawsuits against major financial institutions, such as Capital One, during yesterday’s hearing. Warren and other committee members, including Sen. Mark Warner, questioned McKernan’s ability to lead the agency given the Trump administration’s interference. McKernan defended his position, reiterating that he would “right-size” the Bureau and ensure that it operates within its legal framework. Still, Sen. Jack Reed, [D-R.I.], remarked, “I have the sinking feeling you’re departing Liverpool on the Titanic, so good luck,” signaling his belief that McKernan’s leadership would face overwhelming challenges given the current political climate surrounding the CFPB.
To his credit, McKernan never wavered from his talking points and claimed to not be aware of what has happened at the CFPB this month. He did drop one little nugget when he agreed that the CFPB is not a “prudential regulator” like the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, and he did also offer a compliment to former Director Rohit Chopra.
What he said:
