Trump CFPB Pick McKernan to Lead Agency Targeted for Shutdown

President Donald Trump’s nomination of Jonathan McKernan to lead the Consumer Financial Protection Bureau brought some relief to industry and consumer advocates hoping for a stable agency, but the watchdog’s future still hangs in the balance following nearly two weeks of attacks.

McKernan previously served on the Federal Deposit Insurance Corp.’s board for more than two years, resigning his post Feb. 10.

McKernan, a Republican, developed a reputation as a serious regulator who was able to find some common ground with his Democratic colleagues on the FDIC’s board, such as former CFPB Director Rohit Chopra.

That’s welcome news for at least some CFPB watchers following the biggest upheaval at the agency since it opened its doors in 2011.

Acting Director Russell Vought effectively stopped all the agency’s work, halted more than $100 million in vendor contracts, and fired dozens of staffers as Elon Musk’s Department of Government Efficiency gained access to the CFPB’s internal data.

With Trump and Musk both pushing for the CFPB’s demise, there are questions about how much McKernan will be able to shape its future.

“We don’t know how McKernan’s leadership will mix inside a broader coalition that recklessly damaged the CFPB’s institutional capacity,” said Adam Rust, the director of financial services at the Consumer Federation of America. “It’s a wait-and-see moment.”

Reassuring Choice

McKernan worked in the private sector as counsel at WilmerHale and served in government at the Treasury Department and the Federal Housing Finance Agency during the first Trump administration. He also was a senior financial policy adviser to former Sen. Bob Corker (R-Tenn.).

At the FDIC, McKernan took the lead, along with former acting Comptroller of the Currency Michael Hsu, in tackling a sexual harassment scandal that rocked the agency.

McKernan pushed to revamp the FDIC’s culture and find new ways for employees to report abuse.

While he opposed many of the regulatory proposals put forward by his Democratic colleagues, McKernan found some common ground with Chopra in the agency’s review of the influence that asset managers like BlackRock Inc. and Vanguard Group Inc. have on banks whose stocks they hold.

“He’s an independent thinker and he truly believes in not acting outside any one agency’s statutory mandate,” said Alexandra Steinberg Barrage, a partner at Troutman Pepper Locke LLP and a former top FDIC official.

That type of record is welcome at the CFPB, particularly compared with the aggressive tactics Vought used to throttle the agency, Rust said.

“The news that McKernan is the choice is reassuring because he will bring seasoned policy expertise on consumer financial law,” he said. “His nomination signals that the CFPB will continue.”

DOGE Influence

But just what McKernan will be able to do in the role, assuming he wins Senate confirmation, remains to be seen.

The CFPB is likely to be significantly smaller when he takes over. Vought already fired more than 70 probationary employees, many from the enforcement division.

Cuts to nonprobationary staff may come next, according to union officials who asked to remain anonymous.

“McKernan is going to have to convince his staff that there is a path forward for the CFPB in this administration. If he does that, I think he will find career staff willing to support him,” said Melissa Baal Guidorizzi, a Davis Wright Tremaine LLP partner and former CFPB enforcement attorney.

Vought also said he won’t ask the Federal Reserve, which provides the CFPB’s funding, for additional money in the coming quarter.

Meanwhile, DOGE has been going through the CFPB’s financial records and other documents since descending upon the agency last week.

“There will be cleanup to do,” said Christine Hines, the senior policy director at the National Association of Consumer Advocates. “And the question will be, how will he respond to it?”

Some industry players hope McKernan follows the example of former CFPB Director Kathy Kraninger, who led the agency during the first Trump administration.

Kraninger kept supervision moving forward, brought enforcement actions, and completed debt collection and payday lending rules.

“They are in the same mold,” Barrage said. “They’re reasonable, thoughtful people.”

That would likely mean rolling back some of Chopra’s more aggressive rules and guidance—such as actions targeting bank fees and medical debt—and bringing less adventurous enforcement actions.

But Trump and Musk’s stated goal to eliminate the CFPB altogether may complicate matters, said Eamonn Moran, a partner at Holland & Knight LLP and a former CFPB regulatory attorney.

“He may face some constraints ahead of him as it’s not at all clear what the endgame is,” said Moran, a longtime friend of McKernan’s and a former co-worker at WilmerHale.