CFPB nominee likely connected to Trump’s ‘zero-tolerance’ immigration policy

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Kathy Kraninger, the nominee to head the Consumer Financial Protection Bureau, likely was deeply involved in President Trump's "zero-tolerance" immigration policy, according to former officials with the Office of Management and Budget and the Department of Homeland Security.

Kraninger would have taken part in interagency meetings and discussions about the Trump administration's policy of separating migrant children from their parents at the U.S. border as part of her job at OMB, where she is a program associate director for general government programs, these sources said.

"OMB is involved in policy across the executive branch so she absolutely would have deep knowledge and be involved in policymaking around immigration, whether it's the budgetary impact, immigration centers, ICE, or personnel," said Kenneth Baer, a former associate director of OMB for communications and strategic planning in the Obama administration and the CEO and co-founder of Crosscut Strategies, a strategic communications and public affairs firm in Washington. (ICE refers to the U.S. Immigration and Customs Enforcement agency.)

At OMB, Kraninger has budgetary oversight of seven executive branch agencies, including the Department of Homeland Security and the Department of Justice. Additionally, Kraninger previously served for most of her career in homeland security, where before 2017 was a deputy assistant secretary for policy on screening coordination and was involved in implementing screening programs. She also supported the Transportation Security Administration's checkpoint operations and policies.

"It would be likely that someone who covers DHS and DOJ would be working on the design and implementation of a policy like" the zero-tolerance policy. "That would be a typical role," said Seth Grossman, a former deputy general counsel and counselor to former Homeland Security Secretary Janet Napolitano. "At OMB, someone in that position of principal associate director would be involved in major policies, especially when they cut across departments."

OMB also has oversight of the Office of Regulatory Affairs, so any significant policy change, such as the zero-tolerance policy on immigration, would fall under Kraninger's purview, Baer said.

"It's fair to say that moving to a zero tolerance policy was a significant policy change, so it would be surprising, if not shocking, to think that senior officials, including Kraninger, were not in on the conversation with all the agencies," Baer said.

To be sure, it is unclear whether Kraninger supports the policy of separating children from their families or exactly what her role was in the development of that policy. Some who know and support Kraninger, but who declined to speak on the record, said that OMB does not make policy or set priorities, and its civil servants should be considered appropriators.

A White House spokesperson was not immediately available for comment.

But the questions about her involvement are already threatening her nomination. Senate Democrats sent a letter to the administration on Tuesday asking the White House to disclose Kraninger's role in setting the policy. Sen. Elizabeth Warren, D-Mass., placed a hold on the nomination until those questions are answered.

Even if Kraninger was deeply involved in the matter, however, the White House is likely to keep pushing her CFPB nomination.

"Right now the White House is trying to defend the immigration policy so for them to withdraw her name because she might be associated with the policy would be a political hit," said Charles Gabriel, the president of Capital Alpha Partners, an independent research firm. "That would seem like an admission of guilt."

Trump's immigration policy has emerged as a flash point since the Trump administration began separating migrant children from their parents when they crossed the border. ProPublica's audio of children begging for their parents, and photos of children kept behind chained-link fences, have further inflamed debate.

The policy has drawn widespread condemnation, including from JPMorgan Chase CEO Jamie Dimon, who urged the administration to reverse course in a letter to employees on Tuesday.

On Tuesday, Senate Majority Leader Mitch McConnell said that all GOP senators support keeping families together at the border. Republicans now are trying to reach a deal with Democrats to loosen the rules to allow minor children to be detained for extended periods. Pressure has also been building on the administration to stop the policy of its own accord.

Kraninger's boss is Mick Mulvaney, the OMB director who serves a dual role as acting director of the CFPB.

Though Kraninger has scant experience in consumer finance or banking, she has management and personnel skills that the White House says would make her perfect to manage the CFPB.

It is unclear whether the Senate Banking Committee plans to hold Kraninger's nomination hearing soon.

"The confirmation hearing will be really interesting because it could become a banking committee hearing on immigration," said Baer.

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