I’m the guy who couldn’t wait to tune in to the Senate Confirmation Hearing for Jonathan McKernan, nominee for Director of the Consumer Financial Protection Bureau (CFPB). Senator Elizabeth Warren, who helped create the CFPB, was on the panel and kicked things off. Here’s what stood out to me.
“I Will Follow the Law”
McKernan’s response to controversial questions was consistent: “I will follow the law.”
This response applied to questions about:
Whether the CFPB should continue to exist
The need to enforce existing laws
Staffing and leadership decisions
Dropping or continuing cases against financial institutions
He rarely elaborated beyond that.
My Take:
If I had to guess, I’d say McKernan understands that the CFPB still has legal responsibilities that can’t be ignored under the present state of the law. The agency, as it stands, is still required to administer certain consumer protection laws.
He didn’t offer personal opinions on whether the CFPB should continue, nor did he wade into the debate over whether it should receive full funding. Instead, he seemed focused on sending a clear message:
He will leave decisions about the CFPB’s future to elected officials and policymakers. His job, if confirmed, would be to run the agency as it exists, based on the law and the mission set by those in charge. With whatever resources and funding he’s given, his role would be to administer the CFPB’s operations—not reshape them.
That approach opens the possibility of a more restrained CFPB that doesn’t push beyond its statutory mandate. McKernan’s responses suggest that he sees his job as stewardship, not transformation. He’s signaling that if lawmakers want the CFPB to be more aggressive or more restrained, they must codify that in legislation. Until then, he’s simply going to operate within today's structure.
“The CFPB Recovered $20 Billion for Consumers”
Several times, senators pressed McKernan to acknowledge that the CFPB has done good work, pointing to the $20 billion recovered for consumers. His response was something to the effect of:
“To the extent it resulted from illegal action, then [recovery] would be proper.” [paraphrased]
My Take:
This response aligns with McKernan’s opening statement. His remarks made it clear that he believes the CFPB sometimes engaged in wrongful, overreaching application of the law. That context matters.
By framing his answer this way, he’s not outright denying that consumers have benefited from CFPB enforcement actions. Instead, he’s distinguishing between recoveries based on clear violations of the law and those that may have stemmed from questionable legal interpretations by the CFPB. In other words, his position seems to be that enforcement is necessary but should be limited to what the law explicitly allows.
This suggests that, if confirmed, McKernan could take a stricter interpretation of the agency’s enforcement powers. That could mean fewer enforcement actions in gray areas where the law is open to interpretation. It could also mean a shift away from some of the more aggressive tactics the CFPB has used in recent years.
“How Will You Manage the CFPB?”
McKernan repeated his usual line—he’ll “follow the law.” However, when pressed about applying CFPB policies and enforcement, he said his approach would be based on balancing risk, resources, and consumer protection.
My Take:
A few things stood out to me here.
First, McKernan’s answer doesn’t eliminate the possibility of a more restrained CFPB. Just because he says he’ll follow the law doesn’t mean he will interpret it like his predecessor, Rohit Chopra. “Balancing risk, resources, and consumer protection” leaves much room for policy discretion. That means he could still scale back certain enforcement priorities while technically staying within the law.
Second, this is where McKernan’s approach starts to come into focus. His “follow the law” stance does not prevent him from applying a narrower interpretation of the CFPB’s mandate under Dodd-Frank. He didn’t explicitly say he would take a more limited approach, but the way he framed his responses left that possibility wide open.
In other words, his message might be: I’ll enforce the law, but I’ll do so within what I believe to be its intended scope. That could lead to a CFPB that intervenes less aggressively than in recent years. How that plays out, of course, depends on the administration’s broader direction.
Third, the hearing didn’t give us much insight into how he would handle key operational challenges. The CFPB has been operating under significant constraints—staffing limitations, funding questions, and legal challenges to its structure. Some senators seemed to push him to explain how he would manage the agency with limited resources.
By sticking to “I will follow the law,” McKernan sidestepped questions about staffing and funding. He was making it clear that those decisions aren’t in his hands.
Final Thoughts
I encourage you to listen to the hearing for yourself and form your own opinion.
While I expected more fireworks with Senator Warren, the hearing reinforced my existing views:
Laws and regulations are here to stay. Compliance remains critical.
States may step up enforcement. Attorneys general could play a more significant role.
We could see more collaboration with federal regulators. This may help with complex compliance issues.
Innovation may increase. A more collaborative approach could encourage new mortgage solutions.
Was “I will follow the law” a cop-out?
Maybe. But given the political setting, McKernan likely said what he needed to keep his confirmation on track. A more detailed answer could have alienated either side, and he clearly wasn’t there to make waves.
Like him or not, like the CFPB or not, it’s unclear whether the administration could put forward a more qualified nominee.
Is legislative change on the horizon? We’ll see.
Want my personal take? Reach out to raymond@loanriskadvisors.com.
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