It has been a busy first few weeks for the Consumer Financial Protection Bureau (CFPB) under the second term of the Trump administration.
After a thorough examination of all federal agencies by Trump to stop work, and changes in leadership at the Bureau, the Trump administration has nominated Jonathan McKernan, most recently a Director on the Board of the Federal Deposit Insurance Corporation (FDIC), as next Director of the CFPB.
Sworn in as a member of the FDIC’s Board of Directors on January 5, 2023, McKernan previously was a Counsel to Ranking Member Pat Toomey on the staff of the Senate Committee on Banking, Housing, and Urban Affairs. He also has served as a Senior Counsel at the Federal Housing Finance Agency (FHFA), a Senior Policy Advisor at the Department of the Treasury, and a Senior Financial Policy Advisor to Sen. Bob Corker.
Prior to his government service, McKernan was an attorney in private practice, focused on matters under the banking and consumer financial laws.
From November 2023-May 2024, McKernan served as Co-Chairman of a Special Committee of the FDIC Board that oversaw an independent third-party review of allegations of sexual harassment and professional misconduct at the FDIC, as well as issues relating to the FDIC’s workplace culture.
McKernan holds a BA and Master of Arts in Economics from the University of Tennessee, and a JD with High Honors from Duke University’s School of Law.
The CFPB was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 in the wake of the financial crisis of 2007-2008. The role of the CFPB is to review the practices of companies, banks, and lenders in the financial services industry and work to protect consumers from predatory practices. Authorized by Congress in 2010, the role of the CFPB is to reform predatory and deceptive financial industry practices that policymakers believed led to a wave of mortgage defaults, and ultimately to the crisis and subsequent Great Recession.
The Community Home Lenders of America (CHLA), a non-profit association that focuses on small and mid-sized community-based mortgage lenders, said in a statement, “CHLA commends the nomination of Jonathan McKernan to be director of the CFPB. He brings a wealth of experience as a financial regulator, and we are confident he can make the fundamental changes to the CFPB that are needed to streamline regulation of smaller IMBs, which is critical to supporting access to mortgage credit.”
A Busy Start to 2025
Former CFPB Director Rohit Chopra, who had served in the role since being appointed by President Joe Biden in 2021 to a five-year term, announced that he has been relieved of his duties by President Donald Trump on February 1.
Less than 48 hours after Chopra’s removal as Director of the CFPB, recently confirmed Treasury Secretary Scott Bessent was named acting head of the Bureau.
This past Friday, Russell Vought, newly confirmed Director of the Office of Management and Budget (OMB), took over as Acting Administrator of the CFPB. Vought instructed CFPB staffers to work from home, while halting all CFPB enforcement efforts. Vought also said he would cut off funding of the Bureau, writing on X that he had informed the Federal Reserve that the agency would not take its next draw of unappropriated funding because it wasn’t needed to fulfill its duties.
“The Bureau’s current balance of $711.6 million is in fact excessive in the current fiscal environment,” he wrote on X. “This spigot, long contributing to CFPB’s unaccountability, is now being turned off.”
Tuesday evening, Wired reported that dozens of CFPB employees were terminated—mostly targeted contractors and probationary employees who have served less than two years at the Bureau. NPR reported that Lorelei Salas, former CFPB Assistant Director for Supervision Policy and Acting Assistant Director for Supervision Examinations and Enforcement, and Eric Halperin, former Assistant Director for the Office of Enforcement for the Bureau, were placed on administrative leave.
Elon Musk’s Department of Government Efficiency (DOGE) continues to dive into the day-to-day activities of the CFPB and other government agencies. Wired reported that three DOGE staffers, including Gavin Kliger and Nikhil Rajpal were given access to CFPB’s HR, procurement, and financial infrastructure.
