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President Donald Trump has nominated Jonathan McKernan as the director of the Consumer Financial Protection Bureau (CFPB), a major move in the administration’s broader government restructuring. The nomination has been sent to the Senate and is expected to be approved.
McKernan, who previously served as a board member of the Federal Deposit Insurance Corporation (FDIC) and senior counsel of policy at the Federal Housing Finance Agency (FHFA), announced his departure from the FDIC just a day before his nomination. If confirmed, he will rejoin the FDIC board in a secondary role.
McKernan takes over the CFPB after a series of acting directors, including Treasury Secretary Scott Bessent and Director of the White House Office of Management and Budget Russell Vought. On Feb. 6, Vought was confirmed by the Senate to lead the Office of Management and Budget just three days after firing Biden-era CFPB Director Rohit Chopra.
As acting director, Vought quickly moved to scale back CFPB operations, following Trump’s executive orders aimed at shrinking the federal government by:
- Discontinuing supervision activity, investigations and enforcement actions
- Suspending the effective dates of all final rules not yet in effect
- Cutting off the bureau’s funding, calling its $711.6 million balance “excessive”
- Closing CFPB headquarters, ordering staff to work from home temporarily before ultimately ceasing all operations
The National Treasury Employees Union, which represents CFPB employees, responded by filing two lawsuits against Vought on Feb. 9.
One suit challenges Vought’s order to stop work, calling it “unlawful,” while the other argues that the Department of Government Efficiency (DOGE) should not have access to CFPB employee data, citing potential risks of misuse.
Before McKernan’s nomination, he pushed for stronger oversight of large asset managers at the FDIC, arguing that their influence could distort bank management, according to Banking Dive. Though generally aligned with Republican priorities, he has backed bipartisan efforts to tighten regulations on firms such as Vanguard and BlackRock.
His prior experience includes serving as a senior financial policy advisor for Sen. Bob Corker, former chair of the Senate Foreign Relations Committee, and holding counsel roles with the Senate Committee on Banking, Housing, and Urban Affairs and the U.S. Treasury.
According to the FDIC, McKernan also co-chaired a special committee that oversaw an independent review of workplace misconduct and issues with workplace culture from November 2023 to May 2024.
Peter Idziak, a senior associate at mortgage law firm Polunsky Beitel Green, said many in the lending industry are hopeful that McKernan’s nomination signals that rather than shutting the CFPB down, the Trump administration intends to revisit policies and practices that have allegedly increased costs for consumers and stifled innovation.
“Given McKernan’s policy expertise and significant tenure within government, his nomination may signal that the Trump Administration ultimately intends to reform the CFPB rather than ‘deleting’ it,” Idziak said, in a statement. The Trump administration “may have realized that simply hollowing out the Bureau would leave regulations crafted by the Biden administration in place to be enforced by states and the courts.”
The CFPB polices illegal kickbacks in the real estate industry, in addition to protecting consumers from unfair, deceptive or abusive lending practices.
The legislation that created the CFPB, the Dodd-Frank Wall Street Reform and Consumer Protection Act, transferred regulatory oversight of the Real Estate Settlement Procedures Act (RESPA) from the Department of Housing and Urban Development (HUD) to the CFPB.
RESPA includes restrictions and prohibitions aimed at preventing mortgage lenders and settlement services providers from paying real estate agents and brokers for sending their business their way without providing proper disclosures to consumers.
