Trump’s Eventual CFPB Pick Will Work in White House’s Shadow

President Donald Trump is mulling his options for a nominee to lead the Consumer Financial Protection Bureau after withdrawing his first pick, but his eventual choice will inherit a hollowed-out agency and a White House eager to kneecap it at every turn.

Treasury Secretary Scott Bessent announced May 9 that Jonathan McKernan, Trump’s first choice for full-time CFPB director, would be nominated instead as Treasury’s head of domestic finance.

Among the names being considered for CFPB director are Mark Calabria, an Office of Management and Budget official currently detailed to the CFPB and former director of the Federal Housing Finance Agency, and acting Comptroller of the Currency Rodney Hood, according to industry and Capitol Hill sources who requested anonymity to discuss the process.

Whether the next nominee is one of those candidates or someone else entirely, they’re unlikely to have much room to maneuver.

Acting Director Russell Vought has attempted to fire around 90% of the CFPB’s staff, although the terminations are on hold while litigation proceeds. Meanwhile, the House-passed reconciliation bill would slash the CFPB’s budget by about 70%.

And Vought, in his role leading OMB, will loom over any actions a new CFPB director takes, likely preventing any major regulatory or enforcement efforts.

“The White House is going to dictate what the policy, if any, is,” said Gary Rubin, a senior director at Mindset, a Washington policy analysis and lobbying firm.

The White House and Calabria didn’t respond to requests for comment. An OCC spokesperson declined to comment.

Stalled Process

Trump’s decision in February to nominate McKernan, previously a Federal Deposit Insurance Corp. board member, was seen by industry and even some consumer advocates as an indication the administration would allow the CFPB to continue to carry out its basic functions, even in a diminished capacity.

McKernan’s nomination advanced quickly out of the Senate Banking Committee, but it languished in the Senate.

Senate Banking Committee Chairman Tim Scott (R-S.C.) said at an April banking industry conference that he anticipated a vote on McKernan’s nomination in the early part of May and that he was hoping Vought would be done with the work of reshaping the CFPB before McKernan took over.

Should he win confirmation for the Treasury post, McKernan will instead be able to oversee the work of all federal financial regulators as the Trump administration pushes for more coordination.

It’s possible McKernan could take over as acting CFPB director once confirmed for the Treasury role, since Vought’s term as acting chief is supposed to expire later this year under the 1998 Federal Vacancies Reform Act.

The other option is nominating Calabria, Hood, or someone else entirely.

Any nomination is likely to face the same delays that McKernan’s did due to tight floor time and the potential for Democrats to gum up the voting process, said Peter Dugas, executive director at global financial services advisory firm Capco and a former Treasury Department official under President George W. Bush.

Hobbled Agency

Even if a new nominee is confirmed, there may not be much of a CFPB left to lead.

Vought and his team have already attempted to fire nearly 1,500 members of the CFPB’s approximately 1,700-person workforce.

That effort was temporarily halted by a federal judge in Washington and a US appeals court, but Vought is still likely to attempt to fire a broad swath of the CFPB’s workers even if the initial mass layoff is fully blocked.

Along with a gutted workforce, money at the CFPB will be tight.

The CFPB isn’t funded by Congress but through transfers it requests from the Federal Reserve.

The Republican reconciliation bill the House passed on May 22 effectively caps the amount of money the CFPB can obtain from the Fed at $249 million in fiscal 2025, down from the existing limit of $823 million.

The Senate is eyeing further changes to the reconciliation package, but consumer advocates are concerned the CFPB cuts will survive.

“This massive budget cut on top of the ongoing efforts to gut the CFPB would make it impossible for the Bureau to carry out its critical mission to protect consumers,” Chuck Bell, the advocacy director of Consumer Reports, said in a statement.

Vought Factor

And then there’s the Vought factor.

Even after his tenure at the CFPB ends, the OMB director will still have a lot to say about the future of the agency.

“Whoever takes the job will be very involved with coordination with the Office of Management and Budget,” Dugas said.

Before rejoining the White House in Trump’s second term, Vought was one of the architects of the Heritage Foundation’s Project 2025, which called on Congress to eliminate the CFPB altogether.

With Vought in the background, the CFPB next leader will likely take the agency in the same direction.

“The only way the leadership of the CFPB is going to matter is if someone is going to lead in a way that is different than what we’re currently seeing,” said Christine Chen Zinner, senior policy counsel at Americans for Financial Reform.