    [Senate Hearing 115-348]
    [From the U.S. Government Publishing Office]

                                                       S. Hrg. 115-348

          NOMINATIONS OF KATHLEEN LAURA KRANINGER AND KIMBERLY A. REED

    =======================================================================

                                    HEARING

                                   BEFORE THE

                                  COMMITTEE ON
                       BANKING,HOUSING,AND URBAN AFFAIRS
                              UNITED STATES SENATE

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                NOMINATIONS OF:

     Kathleen Laura Kraninger, of Ohio, to be Director, Bureau of Consumer
                              Financial Protection

                                   __________

    Kimberly A. Reed, of West Virginia, to be President, Export-Import Bank

                                   __________

                                 JULY 19, 2018

                                   __________

      Printed for the use of the Committee on Banking, Housing, and Urban
                                    Affairs

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                   Available at: http: //www.govinfo.gov /

                                 __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    32-318 PDF                  WASHINGTON : 2018

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                COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                          MIKE CRAPO, Idaho, Chairman

    RICHARD C. SHELBY, Alabama           SHERROD BROWN, Ohio
    BOB CORKER, Tennessee                JACK REED, Rhode Island
    PATRICK J. TOOMEY, Pennsylvania      ROBERT MENENDEZ, New Jersey
    DEAN HELLER, Nevada                  JON TESTER, Montana
    TIM SCOTT, South Carolina            MARK R. WARNER, Virginia
    BEN SASSE, Nebraska                  ELIZABETH WARREN, Massachusetts
    TOM COTTON, Arkansas                 HEIDI HEITKAMP, North Dakota
    MIKE ROUNDS, South Dakota            JOE DONNELLY, Indiana
    DAVID PERDUE, Georgia                BRIAN SCHATZ, Hawaii
    THOM TILLIS, North Carolina          CHRIS VAN HOLLEN, Maryland
    JOHN KENNEDY, Louisiana              CATHERINE CORTEZ MASTO, Nevada
    JERRY MORAN, Kansas                  DOUG JONES, Alabama

                         Gregg Richard, Staff Director

                     Mark Powden, Democratic Staff Director

                          Elad Roisman, Chief Counsel

                          Joe Carapiet, Senior Counsel

                          Kristine Johnson, Economist

                     Elisha Tuku, Democratic Chief Counsel

                Laura Swanson, Democratic Deputy Staff Director

               Corey Frayer, Democratic Professional Staff Member

              Homer Carlisle, Democratic Professional Staff Member

                  Phil Rudd, Democratic Legislative Assistant

                           Dawn Ratliff, Chief Clerk

                          Cameron Ricker, Deputy Clerk

                         James Guiliano, Hearing Clerk

                          Shelvin Simmons, IT Director

                              Jim Crowell, Editor

                                      (ii)

                                C O N T E N T S

                                  ----------

                            THURSDAY, JULY 19, 2018

                                                                       Page

    Opening statement of Chairman Crapo..............................     1
        Prepared statement...........................................    54

    Opening statements, comments, or prepared statements of:
        Senator Brown................................................     3

                                    NOMINEES

    Kathleen Laura Kraninger, of Ohio, to be Director, Bureau of
      Consumer Financial Protection..................................     7
        Prepared statement...........................................    55
        Biographical sketch of nominee...............................    57
        Responses to written questions of:
            Senator Brown............................................    84
            Senator Rounds...........................................   107
            Senator Menendez.........................................   108
            Senator Warren...........................................   113
            Senator Van Hollen.......................................   118
            Senator Cortez Masto.....................................   121
            Senators Brown and Warren................................   123
            Senators Brown, Reed, Menendez, Warner, Warren, Schatz,
              Van Hollen, and Cortez Masto...........................   130
            Senators Brown, Menendez, Warren, and Cortez Masto.......   136
    Kimberly A. Reed, of West Virginia, to be President, Export-
      Import Bank....................................................     9
        Prepared statement...........................................    63
        Biographical sketch of nominee...............................    67
        Responses to written questions of:
            Senator Brown............................................   144

                  Additional Material Supplied for the Record

    Documents submitted in support of the nomination of Kathleen
      Laura Kraninger................................................   147
    Documents submitted in support of the nomination of Kimberly A.
      Reed...........................................................   165
    Letter submitted by Francis Creighton, President and CEO,
      Consumer Data Industry Association.............................   178

                                     (iii)

          NOMINATIONS OF KATHLEEN LAURA KRANINGER AND KIMBERLY A. REED

                                  ----------

                            THURSDAY, JULY 19, 2018

                                           U.S. Senate,
              Committee on Banking, Housing, and Urban Affairs,
                                                        Washington, DC.
        The Committee met at 10:05 a.m., in room SD-538, Dirksen
    Senate Office Building, Hon. Mike Crapo, Chairman of the
    Committee, presiding.

                OPENING STATEMENT OF CHAIRMAN MIKE CRAPO

        Chairman Crapo. This hearing will come to order.
        This morning we will consider the nomination of two
    individuals to serve in critical leadership roles within the
    Administration. I welcome both of you, and congratulations on
    your nominations to these important offices. I see friends and
    family here together with you today, and I welcome them as
    well.
        The nominees before us are Kathy Kraninger, to be the
    Director of the Bureau of Consumer Financial Protection, and
    Kimberly Reed, to be the President of the Export-Import Bank of
    the United States.
        These positions are critically important to protecting
    consumers in the consumer financial products and services
    marketplace and facilitating global trade of U.S. goods and
    services. These nominees bring years of valuable experience at
    nonprofits and in public service and will provide valued
    leadership in carrying out the missions of their agencies.
        Ms. Kraninger has had a distinguished career in public
    service with exposure to a diverse set of Federal agencies, as
    well as developing a particular expertise in the budget and
    appropriations processes.
        Since March 2017, Ms. Kraninger has served as Associate
    Director for General Government at the Office of Management and
    Budget where she oversees and monitors approximately $250
    billion in budgetary resources for numerous Cabinet departments
    and Federal agencies.
        She has also served as OMB's principal policy official for
    issues related to the Treasury Department, Department of
    Housing and Urban Development, and Federal financial
    regulators.
        Prior to joining OMB, she held leadership positions at the
    Department of Transportation and the Department of Homeland
    Security, as well as serving on the staff of several
    congressional committees.
        Given her depth and diversity of public service experience,
    I have the utmost confidence that she is well prepared to lead
    the Bureau in enforcing Federal consumer financial laws and
    protecting consumers in the financial marketplace.
        Ms. Reed was considered by this Committee last year as the
    nominee to serve as the First Vice President of the Export-
    Import Bank, and today we consider her nomination to be its
    President.
        Ms. Reed also has had a distinguished career in public
    service, previously serving as Senior Advisor to former
    Treasury Secretaries Paulson and Snow. In addition, she has
    served on several congressional committees and has held
    impressive leadership positions in the private sector. Ms. Reed
    is well positioned to help move the Bank forward in a positive
    direction.
        With respect to Ms. Kraninger, some Senators have requested
    a long list of documents, including emails, schedules,
    involvement in memos, White House communications, et cetera,
    relating to Ms. Kraninger's role at OMB with respect to the
    Administration's ``zero tolerance policy'' and the
    Administration's response to Hurricane Maria in Puerto Rico.
        These requests are designed to go after certain extraneous
    Administration policies that the requesters do not like and go
    far beyond the practice of this Committee in document
    production. Indeed, I would not expect this Administration or
    any Administration to release documents related to its ongoing
    deliberative process, and, furthermore, my understanding is
    that Ms. Kraninger is not the custodian of these records and
    has given the request for information to the White House.
        As I have indicated, I do not have an expectation that the
    White House or the agencies involved will provide these
    documents, but that is an issue outside this nomination
    process.
        The Democratic Senators of this Committee asked me to delay
    this hearing today to seek these documents. I am unaware of the
    Banking Committee delaying a hearing for such a reason.
        To be consistent, I have followed a similar timeline as the
    Committee set for then-nominee Richard Cordray in 2013. As a
    reminder, the Senate received Mr. Cordray's official nomination
    from the President on February 13, 2013. Approximately 1 month
    later, on March 12, 2013, the Committee held a hearing to
    consider Mr. Cordray's nomination and voted the nominee out of
    Committee 1 week later on March 19th.
        Similarly, the Senate received Ms. Kraninger's official
    nomination from the President on June 20, 2018. Approximately 1
    month later, we are holding this hearing. She has provided all
    of the paperwork that the Banking Committee requires.
        The purpose of these hearings is to provide all Senators of
    this Committee the opportunity to ask any questions of this
    nominee, who will be under oath.
        I intend to ask Ms. Kraninger--who will be under oath--
    about her role in developing policy at OMB. Other Senators will
    be given the similar opportunity to question Ms. Kraninger and
    also follow up with questions for the record, as we
    traditionally do.
        I take the Senate's constitutional authority seriously and
    am confident that Ms. Kraninger will be sufficiently vetted, as
    have our previous nominees, for this Committee to provide a
    recommendation to the full Senate on this nomination.
        As a separate matter, many of us have experienced
    frustration with the Bureau in previous years. In April 2016,
    former Bureau Director Cordray testified before this Committee.
    Senators on the Committee sent questions for the record that
    same month. It took Director Cordray over 16 months to respond
    to this Committee.
        It is my hope that, if confirmed, Ms. Kraninger will be
    more accountable to Senators on this Committee than Director
    Cordray was, and I look forward today to a very vigorous debate
    and a vote on the nominees.
        Senator Brown.

               OPENING STATEMENT OF SENATOR SHERROD BROWN

        Senator Brown. I thank the Chair. I think the Chairman
    knows that that comparison is specious, but I will get to that
    in a moment. It was a very simple request that has been out
    there 4 weeks, but I want to talk more about that, as I said,
    in a moment.
        Welcome to the nominees, especially Ms. Kraninger, who
    brought her Ohio family with her. Good to see you all. And Ms.
    Reed also has some Ohio ties. Nice to see you and good to see
    you both.
        The financial crisis started when greedy lenders lured
    families into scam loans they could not afford. The whole
    enterprise was designed to transfer wealth upwards--stripping
    hard-earned home equity from the middle class, putting it in
    the pockets of shady lenders, and with that they were
    successful. And as Members of this Committee are familiar with,
    I see that every day where I live in Cleveland. My wife and I
    live in Zip code 44105, 5 or 6 miles from where Ms. Kraninger
    grew up. My Zip code, 44105, in 2007, the first half of that
    year, had more foreclosures than any Zip code in the United
    States of America. And you know or should know what that does
    to families and to neighborhoods.
        Behind all the numbers were thousands upon thousands of
    painful conversations around kitchen tables. Congress created
    the Consumer Financial Protection Bureau to prevent the need
    for those heartbreaking conversations ever again.
        Like food inspectors, the CFPB hunts down scammers trying
    to sneak toxic products back onto our kitchen tables. The
    Consumer Bureau is not just a response to the last crisis. It
    is one of the most important tools we have to prevent the next
    crisis.
        Though 2008 should have served as a wake-up call for
    watchdogs and CEOs, over the past 6 years, Consumer Bureau
    inspectors have still found plenty rotten in the banking
    industry.
        From 2012 to 2017, the CFPB won $12 billion--$1,200
    million, $12 billion--in relief for 29 million Americans. That
    is 12 billion reasons for Wall Street to hate the CFPB.
        Lucky for them, lucky for Wall Street, they were able to
    install one of their own--Mick Mulvaney--to head the Bureau. He
    has dropped investigations. He has reduced meaningful
    settlements to slaps on the wrist. Now he wants his protege to
    run the agency.
        For months, I urged the Administration to nominate someone
    to lead the CFPB who had a track record--a track record--of
    working for consumers. Unfortunately, Ms. Kraninger has no
    experience whatsoever in consumer protection.
        Mr. Mulvaney argues she should be approved because of her
    management and budget experience. It is hard to see how that is
    enough, especially given the nominee's refusal to provide
    information requested by Committee Members.
        Every one of us on this side of the dais wanted this
    hearing postponed until we got information about that
    experience. When the nominee and I met, she said it was out of
    her hands, she would try to get a response. That was over a
    week ago. Still nothing. The letter was 4 weeks ago. The
    response was 1 week ago. What is the Administration hiding?
        If my Republican colleagues are concerned about
    transparency and accountability and responsiveness, they should
    note this nominee's failure to reply to a simple request about
    her responsibilities in her current job--again, a request that
    was submitted 4 weeks ago.
        Here is what we do know. At the Office of Management and
    Budget, she signed off on a $1.9 trillion tax break for
    millionaires. To pay for it, she helped write a budget--she
    called it an ``aspirational document'' to me--that would triple
    the rent for families that are already struggling to get by.
    $1.9 trillion in tax cuts, 80 percent of those tax cuts over
    time go to the richest 1 percent, and this Administration, with
    the approval of the designee to be head of CFPB, is willing to
    triple the rates for families that are already struggling to
    get by.
        She has been involved in the management of one disastrous
    policy after another. The botched response to hurricanes in
    Puerto Rico has left American citizens--American citizens--to
    fend for themselves. A housing policy that undoubtedly will
    increase homelessness. The Administration's cruelest policy
    yet: separating children from their parents at the border.
        I hope we will know more by the end of the hearing. These
    issues go to the heart of how she will handle any new job.
        Management is supposed to be Ms. Kraninger's one
    qualification.
        Nobody wants Mr. Mulvaney out of the CFPB faster than I do.
    But American consumers cannot afford 5 years of someone who
    stands with the bankers in the Administration and stands with
    the bankers on Wall Street. We need a CFPB Director who will
    sit with hardworking families at their kitchen tables.
        I know my Republican colleagues are eager to move this
    nominee in spite of the Administration's stonewalling. I wish
    they showed a little of this kind of urgency when it comes to
    the jobs that have been put at risk by the failure to have a
    functional Export-Import Bank.
        Ms. Reed has returned for her second appearance before the
    Banking Committee. She is well qualified to lead Eximbank, and
    our Committee voted overwhelmingly to support her nomination as
    First Vice President last December.
        There are 109 export credit agencies and credit programs
    throughout the world that support foreign manufacturers, but
    the U.S. has literally--has unilaterally and literally
    disarmed. When it comes to helping exporters, the policy some
    of our colleagues seems to be ``America Last.''
        It has been 4 years since the Senate confirmed an Eximbank
    nominee, leaving Eximbank partially shut down for 3 years.
    American businesses have transactions worth more than $40
    billion pending at the Bank. Yet there has been stonewalling
    from this Committee and this Republican leadership for years.
    Those deals and the resulting jobs will move overseas unless
    the Bank's board is restored.
        If President Trump and Republicans are serious about
    helping American manufacturers after 3 years of obstruction--
    there is no other word to describe it--they should urge the
    Majority Leader to schedule consideration of Ms. Reed and the
    other Eximbank Board members immediately.
        In one sense, you brought it up at the end of your opening
    statement, Mr. Chairman. I want to say one more thing. There
    is, simply put, no comparison to Rich Cordray in this process.
    Seven hundred 30 days passed between his nomination and his
    confirmation, July 18, 2011, to July 16, 2013, almost 2 full
    years. Ms. Kraninger was nominated 1 month ago. Two years-1
    month comparison. Mr. Cordray--look at his qualifications: Ohio
    Attorney General, Solicitor General, clerked for Supreme Court
    Justice Kennedy, argued in front of the Supreme Court six
    times, deep experience with consumer rights and civil rights
    laws. Cordray's qualifications were never under question, but
    44 Republicans signed a letter saying they would support no
    one--no one--to head the agency unless we changed the law to
    weaken the agency. Cordray's first nomination died in the
    Senate. When he was renominated--again, even after having a
    clear track record at CFPB--Republicans continued to oppose his
    nomination until we defanged the CFPB. You know, that is what
    Wall Street wanted, so like one bird flying off the wire, they
    all fly off the wire, continue to side with Wall Street to
    defang this agency.
        All we ask for with Ms. Kraninger is a response to basic
    questions regarding Ms. Kraninger's current job so we can
    evaluate her management skills, which this nomination hangs on.
    Again, it is not her work in consumer protection. It is her
    management skills. Tell us more about those management skills.
        Republicans held up Mr. Cordray for 2 years, demanding
    changes to the law before they would even consider a
    nomination, so the comparison between that process and this,
    Mr. Chairman, is specious.
        Chairman Crapo. Thank you, Senator Brown. Since you decided
    to go into that, I will also go into a little further
    discussion of the document request.
        It has been described here today as a ``simple request''
    that goes into Ms. Kraninger's relationship to some of these
    policies. The fact is it is a document request that goes into
    virtually every conceivable document related to the
    deliberative process, the budgeting process, and the
    implementation concerning Administration policies ranging from
    immigration to hurricane relief. And now we have had the Tax
    Code thrown in as well.
        Ms. Kraninger is not the custodian of these documents. She
    has forwarded this request to the White House. These document
    requests are obviously designed to go after various policies of
    the Administration with which the requesters disagree and go
    far beyond any precedent of this Committee in what it requires
    of nominees.
        These requests seek to open up extensive document
    production in five agencies: OMB, DOJ, DHS, Treasury, and HUD,
    including also the White House itself. This is a multifaceted
    battle with the President being played out in the context of
    this Committee's nomination process. Indeed, I would not expect
    this Administration or, frankly, any Administration to release
    these types of documents related to its deliberative process.
        As I said before, Ms. Kraninger has provided all documents
    and information which this Committee requires of nominees, and
    we will get answers from her today on the issues you said we
    need to get information----
        Senator Brown. One more thing. We have never really done
    this before, but I am just kind of amazed by this. I am sorry,
    Mr. Chairman, you have to explain the inexplicable on the part
    of this Trump White House that simply will not step up on this.
    If there is a claim of deliberative process, the White House
    never has used that claim. They have never even responded to
    the letter, let alone any details that she had been willing to
    share with any of the Members with whom she met one on one,
    including me. She also has not been willing, nor has the White
    House, to give us an answer to the letter, even if the answer
    is, ``We claim deliberative process.''
        So I just do not--I hope the Committee is not going to
    start acting like this, that the White House does not have to
    answer letters, does not have to answer questions from Members
    of the Senate, Mr. Chairman.
        Chairman Crapo. Well, it is unfortunate to me that the
    Committee is starting to get into these kinds of battles, too.
    I am discouraged by that, and I hope that this does not change
    the tenor of cooperation that we have on many other issues.
        I understand the importance of this nomination. I
    understand the long-term battle we have had over the CFPB and
    its leadership. And the bottom line is I do not know--as I
    understand, Ms. Kraninger has passed this document request on
    to the White House. There are processes by which we can all
    seek documents from agencies and the White House, and I assume
    you are engaged in that process now that she has passed this
    document on.
        I do not know what their answer is going to be. I will tell
    you what I think their answer will be, but I do not know what
    it will be. That issue is an issue that goes beyond this
    nomination process. That is my point today.
        Senator Brown. I just think there is no incentive for the--
    if we continue on their merry way, just like all of you on this
    Committee that have spoken with justified outrage, particularly
    Senator Sasse and Senator Corker, with the President's
    performance on Monday night--or Monday in Moscow--or in
    Helsinki, but there is never a consequence for this
    Administration because we all continue to do the
    Administration's--all of you continue to do the
    Administration's bidding, whether it is confirmation of Ms.
    Kraninger or whether it is confirming another judge or whether
    it is passing another tax cut for rich people in this country.
    Why should the President change his behavior when there is
    never a price to pay? And one price would be let us not do this
    nomination until they actually give us an answer on some of
    these questions.
        Chairman Crapo. Well, like I said, I understand the battle
    that you are having with the President on many issues. I do not
    agree with transporting that battle into this nomination
    process, and so today we will proceed.
        Would the witnesses please rise and raise your right hands,
    please? Do you swear or affirm that the testimony that you are
    about to give is the truth, the whole truth, and nothing but
    the truth, so help you God?
        Ms. Kraninger. I do.
        Ms. Reed. I do.
        Chairman Crapo. And, also, do you agree to appear and
    testify before any duly constituted Committee of the Senate if
    asked?
        Ms. Kraninger. I do.
        Ms. Reed. I do.
        Chairman Crapo. Thank you. You may be seated.
        Each of your written statements will be made a part of this
    record in their entirety. Before you begin your statements, as
    your turn comes, I invite you to introduce your family who are
    here with you if you would like to do so. And, Ms. Kraninger,
    we will start with you. You may please proceed.

         TESTIMONY OF KATHLEEN LAURA KRANINGER, OF OHIO, TO BE
           DIRECTOR, BUREAU OF CONSUMER FINANCIAL PROTECTION

        Ms. Kraninger. Chairman Crapo, Ranking Member Brown,
    Members of the Committee, thank you for the opportunity to
    appear before you today. It is a privilege to be here as the
    President's nominee for Director of the Bureau of Consumer
    Financial Protection. I want to thank President Trump for this
    honor and for the confidence he has placed in me with this
    nomination.
        I would also like to express my deepest gratitude to my
    family and friends who have joined me today. My parents, Dave
    and Pat, as Senator Brown mentioned, are from Cleveland, Ohio.
    My older brothers, Dave and Dan, and their families traveled
    from Wisconsin and Connecticut. My younger brother, Matt, and
    his family are watching online.
        I am incredibly lucky to have an amazing family who has
    encouraged me in every endeavor and who has taught me that with
    hard work and dedication everything is possible in this country
    of ours. I am also especially grateful for their steadfast
    support as I have followed my call to public service and
    pursued a career serving the American people.
        My love for our country, its ideals and promise, drives my
    commitment to public service. It sparked my interest in my
    university's summer internship program where I worked for my
    hometown Congressman, Senator Brown. It inspired my decision to
    join the Peace Corps and serve for 2 years overseas teaching in
    the former Soviet Union. There I saw firsthand the devastating
    impact of communism, the economic consequences of central
    planning, and the absence of free markets and the rule of law.
        Following the attacks on September 11, 2001, I felt the
    call even more deeply, to serve our country in a time of need.
    I am very proud to have served on the leadership teams at both
    the Departments of Transportation and Homeland Security during
    that extraordinarily challenging time for our Nation. I have
    also been honored to serve three congressional committees,
    including the Senate Appropriations Committee under Senator
    Shelby's leadership. In my current position as Associate
    Director at the Office of Management and Budget, I have taken a
    broader leadership role, and I oversee $250 billion in
    budgetary resources and related policies for 7 Cabinet agencies
    and 30 other Federal agencies, including the Bureau, and the
    other financial regulators.
        Throughout my career I have focused on implementing common-
    sense solutions to complex problems and delivering real value
    for the American people. While I will not prejudge and cannot
    predict every decision that will come before me as Director, if
    confirmed, I can assure you that I will focus solely on serving
    the American people.
        Congress established the Bureau of Consumer Financial
    Protection ``to ensure all consumers have access to markets for
    consumer financial products and services . . . that are fair,
    transparent, and competitive.'' I am firmly committed to
    fulfilling that congressional mandate. To do so, I will
    establish four initial priorities.
        First, the Bureau should be transparent and fair, ensuring
    its actions empower consumers to make good choices and provide
    certainty for marketplace participants. In particular, the
    Bureau should make robust use of cost-benefit analysis, as
    required by Congress, to facilitate competition and provide
    clear rules of the road. In my experience, effective use of
    notice and comment rulemaking is essential to proper balancing
    of all interests. It also enables consideration of tailoring to
    reduce the burden of compliance, particularly on consumers and
    smaller marketplace participants.
        Second, the Bureau should work closely with the other
    financial regulators and the States on supervision and
    enforcement. Nothing is more destructive to competitive markets
    and consumer choice than fraudulent behavior. Under my
    stewardship, the Bureau will take aggressive action against bad
    actors who break the rules by engaging in fraud and other
    illegal activity.
        Third, the Bureau must recognize its profound duty to the
    American people to protect the data in its possession. Under my
    leadership, the Bureau would limit data collection only to what
    is required under law and is necessary to carry out its mission
    and ensure that that data is protected. The issue clearly needs
    more attention because consumers are unaware of the
    vulnerabilities they face and unsure of what steps to take to
    protect themselves.
        Fourth, the Bureau must be accountable for its actions,
    including its expenditure of resources.
        As a former congressional staffer, I appreciate the
    important role of Congress in overseeing this agency. I value
    the advice and perspectives you have shared with me in the
    meetings over the past month--conversations that I welcome
    going forward, should I be confirmed in this important
    position.
        Thank you for your consideration.
        Chairman Crapo. Thank you.
        Ms. Reed.

         TESTIMONY OF KIMBERLY A. REED, OF WEST VIRGINIA, TO BE
                     PRESIDENT, EXPORT-IMPORT BANK

        Ms. Reed. Chairman Crapo, Ranking Member Brown, Senators,
    thank you for the opportunity to appear before you today. Thank
    you as well for this Committee's favorable bipartisan vote to
    advance my previous nomination to serve as First Vice President
    of the Export-Import Bank of the United States. I now return to
    you as the President's nominee to serve as President of
    Eximbank, a position that includes serving as Chairman of the
    Bank's Board of Directors. I thank President Trump for his
    confidence in me to advance Eximbank's mission: creating and
    supporting American jobs by facilitating the export of U.S.
    goods and services.
        If confirmed, I will be both the first woman and the first
    West Virginian to be President and Chairman of this 84-year-old
    institution.
        I also appreciate the encouragement and support of the
    President's National Economic Council Chairman Larry Kudlow and
    diverse organizations focused on American prosperity.
        I would like to recognize my father, Terry, and sister,
    Ashley. I lost my mother, Janet Logue Reed, an Ohioan, to
    cancer when I was 9 years old, and tomorrow would be her 70th
    birthday, so I send her my love and know that she is with us.
        I thank you for the encouraging and supportive individual
    meetings to discuss your views and the positive impact Eximbank
    has made for the workers in your States and the potential to do
    more to support them. If confirmed, I will work especially hard
    to maintain open lines of communication with you and the
    Congress.
        I am grateful for the support of my home-State Senators,
    Shelley Moore Capito and Joe Manchin. I would bring the
    grounding of my West Virginia upbringing to Eximbank.
        In 1985, Senator Capito's father, Governor Arch Moore,
    bestowed upon me a golden horseshoe pin for an academic award
    that I wear today. Its inscription reads: ``Montani Semper
    Liberi''--``Mountaineers Are Always Free''. I believe that
    freedom, in the form of free-market principles, is the best way
    to foster economic opportunity for all Americans.
        Throughout my 22-year career, I have embraced these
    principles to make a positive difference for our Nation's
    businesses and workers while also protecting the American
    taxpayer. I would bring these values to Eximbank.
        Still, there is room for improvement to keep America on
    this road to prosperity, and Eximbank is no exception. If
    confirmed, I will work to ensure that Eximbank faithfully
    implements all laws and reforms enacted by Congress. I would
    launch a review to ensure that Eximbank truly is the ``bank of
    last resort'' and not the other way around.
        There are now 109 foreign Export Credit Agencies, or ECAs,
    in other countries--up from 95 when I testified before you last
    November. Eximbank recently reported on ``the increasing
    `weaponization' of export trade credit by the world's ECAs to
    complement increasingly nationalistic trade policies--
    particularly those initiated by China.'' If confirmed, I look
    forward to working with the Administration and the Congress on
    an aggressive response to China's unfair trade policies.
        In a perfect world, there would be no ECA financing. If
    confirmed, I will work with the U.S. Government and, as
    appropriate, the OECD, G-20, WTO, and other forums to move
    toward the ultimate goal of eliminating all ECA financing. On
    that you have my pledge.
        Until that goal is reached, the United States should not
    unilaterally disarm in a fiercely competitive global economy.
    While we negotiate, we should not place our Nation in a worse
    position than our foreign counterparts. As President Trump
    stated regarding export financing: ``[W]hen other countries
    give it, we lose a tremendous amount of business.'' Therefore,
    if the Senate confirms a Bank Board quorum, I will take
    responsible steps to get Eximbank operational so America can
    compete on a more level playing field. Eximbank has more than
    $40 billion in pending applications supporting 250,000 U.S.
    jobs. We need to keep and support these jobs in the United
    States while we, at the same time, work to reform the export
    subsidies of our competitors to save even more. We can do both.
        Eximbank must also treat all American companies fairly,
    especially small- and medium-enterprises. I would ensure that
    Eximbank--working with community banks and community
    development financial institutions that I am so familiar with--
    helps small businesses and the agriculture sector, which is
    vital to rural America.
        In closing, I would like to underscore that good governance
    is critical. Eximbank, which has a very low 0.4 percent default
    rate, is self-sustaining because of the fees and loans it
    charges to the foreign purchasers and has returned $14.6
    billion to the U.S. Treasury since the year 2000. We need to
    ensure that it stays that way.
        Building on my time in the Congress on oversight,
    investigations, and Government reform, I would focus on strong
    standards of conduct, increased transparency, and sound risk
    management practices. I would work with you and our Inspector
    General to ensure we are doing all we can to eliminate waste,
    fraud, and abuse and give better value to the taxpayer.
        Thank you for your consideration. I would be pleased to
    answer any questions.
        Chairman Crapo. Thank you, Ms. Reed.
        And I will start my questioning with you, Ms. Kraninger. As
    was obvious in the opening discussions between Senator Brown
    and myself, there is a desire on the part of some of the
    Senators on the Committee to know what involvement you had, if
    any, in certain policy decisions that have been made by the
    Administration. Can you discuss to what extent, if any, you
    were involved in the development of the Administration's zero
    tolerance policy?
        Ms. Kraninger. Senator, I appreciate the question. I had no
    role in setting the zero tolerance policy, as I have said to
    many Members in our meetings. I recognize the reason for the
    question being asked. It is important to note that the Office
    of Management and Budget has an extensive role in supporting
    agencies as they implement the President's priorities and
    agenda. That includes legislative proposals, regulatory
    proposals, budgetary resources, and those kinds of facets of
    things. So it is clear that since the beginning of the
    Administration, immigration policy, border security policy
    broadly has been a very detailed discussion within the
    Administration. There have been myriad meetings at all levels
    of the Administration that I have attended, that the Director
    and Deputy Director and my staff have attended. And in addition
    to that, Senator, to your note, I do believe that the
    protection and preservation of the deliberative process is
    critical to the ability of the Administration to develop policy
    and implement policy.
        I do not believe it is appropriate, frankly, or fair or
    right for me to articulate the advice that I gave or to
    characterize the discussion that others may have had or brought
    to the table. But I can assure you and all of the Members that
    in every position that I have ever held and every individual I
    have supported in my career, I have given my best advice based
    on the best information available at the time. And that is
    certainly what I have done in the area of immigration and
    border security, and I would note again I had no role in
    setting the policy.
        Chairman Crapo. Thank you. And the same question basically
    with respect to the Administration's response to Hurricane
    Maria in Puerto Rico.
        Ms. Kraninger. Senator, with respect to hurricane response,
    the Office of Management and Budget, including myself, as I
    said, my staff, the Director, we have a role in reviewing
    disaster declaration recommendations that go to the President.
    So we are involved from that point. We also put together at the
    Office of Management and Budget the supplemental requests that
    the Administration puts forward to the Hill when they are
    necessary.
        Obviously, last fall was a devastating hurricane season in
    the Atlantic that included Puerto Rico being hit by two
    hurricanes, one after the other, with Irma and Maria. So there
    were devastating impacts to that. Clearly, additional resources
    were needed, and the Office of Management and Budget supported
    the President in putting forward those requests that Congress
    considered and obviously responded to in providing the
    resources necessary.
        Chairman Crapo. Well, thank you.
        And, Ms. Reed, U.S. companies are increasingly challenged
    by subsidized export financing from China and other foreign
    Nations. Right now who is picking the winners and losers in the
    global marketplace? And who, if anyone, should be?
        Ms. Reed. Right now, sir, the United States is not picking
    winners for the United States workers because Ex-Im is not
    operational. So as I mentioned in my testimony, we have 250,000
    jobs that potentially could be supported by a reported $40
    billion in applications waiting for an Export-Import Bank Board
    quorum. If I am confirmed, I will not pick winners and losers.
    I will treat all applicants equally and fairly. That is what
    the charter passed by the Congress dictates. I will uphold the
    law. But I also will do all I can to help our small businesses
    in this country. It is very important to me, and I have a long
    track record on that.
        Chairman Crapo. And I am sure you are aware that there are
    a number of reforms that many are seeking to see implemented at
    the Eximbank. If you are confirmed, are there reforms you will
    prioritize?
        Ms. Reed. Yes, sir. As I outlined in my testimony, I am
    very dedicated to increased transparency. We also have to
    protect our American company applicants from releasing their
    proprietary confidential business information, but I will take
    a hard look, if confirmed, at how we can do things to make what
    Eximbank does more transparent.
        I also believe that we need to be focused on good ethics
    and, if confirmed and a quorum is confirmed, we will be
    standing up a Risk Committee and be approving our Chief Ethics
    Officer and Chief Risk Officer. And I also believe we really
    need to take a hard look to ensure that the Bank is the bank of
    last resort, and so taking a look at some tests that Eximbank
    currently administers on additionality and economic impact,
    take a look at those again and seek input from all the experts.
    There are many diverse opinions on this, and I think it is
    important as we look at reauthorization in 2019 that we take a
    look at that.
        Chairman Crapo. Thank you very much. My time has expired.
        Senator Brown.
        Senator Brown. Thank you, Mr. Chairman.
        A week ago or so, Ms. Kraninger, we had a good discussion
    in our office, and I appreciate your taking the time and the
    conversation we had. I asked a number of questions about
    tripling the rent for low-income people, about the 600 percent
    interest that people more often than not pay when they get
    payday loans. The Speaker of the House in Ohio resigned, as you
    probably know, under a scandal about payday loans recently, the
    first time in our history.
        Your answer to all of those seemed to be that the market
    will take care of this, and I only just suggest to you that I
    do not think that philosophy recognizes how expensive it is to
    be poor in this country. And I would, as I asked you and as I
    asked Secretary Carson, ask that you spend 3 or 4 hours and
    read the book ``Evicted'' by Matthew Desmond, because I think
    it speaks--it really does speak in a way that is really
    important to understand those issues better.
        I have a couple of questions. Your response to the Chairman
    was that you did not set policy. I understand that. That is the
    term that you used in my office and in a number of other
    offices, and it is the term you used twice in response to the
    Chairman. You did not set policy. But you do help to execute
    policy, and would you talk about--I am interested in what you
    did, not what you did not do. Talk about executing policy. Talk
    about what resources you moved around on the zero tolerance
    policy since neither you nor the Administration will even tell
    us, seem to want to tell us that in response to that letter.
        Ms. Kraninger. Senator, I appreciate the question. With
    respect to the zero tolerance policy, as noted, again, I will
    repeat that I did not have any role in setting it. When the
    Attorney General announced it, it was his prerogative to do so,
    and the Department of Justice has repeatedly asserted that they
    do have the resources to support their mission underneath that
    policy and have done that. So the Attorney General has
    announced publicly----
        Senator Brown. Well, I understand. I am sorry to interrupt,
    but we have 5 minutes. I understand what you did not do. Tell
    me what you did do with the zero tolerance policy.
        Ms. Kraninger. So, similarly, with the Department of
    Justice articulating it had sufficient resources, the
    Department of Homeland Security and the Health and Human
    Services Department as well, which is not under my purview, but
    I am aware of some of the things they are seeking there, those
    Secretaries have looked at what the resources are available
    within their flexibilities provided through the appropriations
    process to see what resources may be necessary to move around.
    There were discussions within the Administration on those
    matters, but it is the prerogative----
        Senator Brown. So what did you--I understand the other
    agencies. I apologize for cutting you off. But what did you
    actually do in your position at OMB on that policy?
        Ms. Kraninger. So, Senator, there were meetings after the
    announcement of the policy as the Secretaries raised questions
    about it and were looking at their own resources to try to
    figure out how to support that implementation. And, again, the
    Office of Management and Budget is there to support those
    agencies, to ask questions, and, again, in terms of the advice
    and details, it would be chilling to the deliberative process
    to give you extensive details on the substance of the
    discussion. I appreciate why you are asking. At the same time I
    do not think that is appropriate to get into the particular
    details of my advice. But I can say generally that the Office
    of Management and Budget supports those agencies in analyzing
    the need and looking at the appropriations law and the needs
    that are made known to us.
        Senator Brown. This is sort of the same nonanswer to the
    letter. When we met last week, I asked you to name some
    enforcement actions that Director Cordray had taken that you
    support. You did not come up with any answers then. Do you have
    any now as you have had a little time to think about it?
        Ms. Kraninger. Senator, it was a good conversation in your
    office. I appreciate you alluding to it as well, and I would
    say on that point specifically, as I noted in my statement, I
    do support the Bureau exercising its authority to take
    enforcement matters when bad actors are operating in the
    system. No one----
        Senator Brown. Can you come up with an example--I am sorry
    to interrupt----
        Ms. Kraninger. Sorry, Senator. Specifically--specifically
    two areas that--the investigations that were launched under
    Director Cordray's leadership and that were continued under the
    current Administration, I can note Equifax certainly. A lot of
    Members, we discussed extensively concerns about credit
    reporting agencies and their practices. The Equifax fallout is
    going to be something that is going to be with us for a long
    time as a Nation and an issue that I know many are grappling
    with. And if confirmed, I would be grappling with the steps
    that need to be taken there. So that was certainly something
    launched under his leadership.
        And I would say, too, the Wells Fargo enforcement actions
    as well. That is an area that, again, completely
    inappropriate----
        Senator Brown. Even though my colleagues here said that
    CFPB did not do its job, but one last question. One of the
    enforcement actions that Director Cordray took was against a
    company scamming 9/11 first responders. The judge in the 9/11
    first responder case struck down CFPB's claims, agreeing with
    the President's Supreme Court that the Bureau is
    unconstitutional. Would you challenge that ruling inside of the
    CFPB?
        Ms. Kraninger. Senator----
        Senator Brown. So, in other words, are you going to take
    the side--I am sorry again. Are you going to take the side of
    the 9/11 scammers, or are you going to take the side of those
    who were scammed as you decide what to do on this court case?
        Chairman Crapo. And please make your response prompt.
        Ms. Kraninger. Absolutely. I am aware of the
    constitutionality questions, Senator. I think they are
    important, but they are not for me in this position to answer.
    The Director has a responsibility to carry out the law as it is
    written and run the agency as it is established now, and that
    is my focus.
        Senator Brown. Thank you.
        Chairman Crapo. Senator Corker.
        Senator Corker. Thank you, Mr. Chairman. And I thank both
    of you for your willingness to serve.
        I do want to respond to Ranking Member Brown with sincere
    warmth. We came in together, and I have enjoyed serving with
    you. It seems to me that what has been happening is if we do
    not like something the President does--and I will take a back
    seat to no one in challenging foreign policy issues, tariff
    issues, with every ounce of energy that I have. But if we do
    not like some of the things the President is doing, we should
    then block nominees that we like.
        I got a call after the Helsinki press conference, which to
    me was one of the worst I have seen, from a leading Democrat--I
    have shared this with some of my friends--and he said,
    ``Corker, you need to block the Supreme Court nominee.'' Well,
    I could hit myself in the knee with a sledgehammer, too, but
    why would I block someone that I generally like over something
    that the President has done?
        And I just want to say that, again, I take a back seat to
    no one. Senator Menendez and I had a conversation about this
    yesterday. But it is actually you that is doing the President's
    bidding on tariffs. Senator Toomey and I tried to block this
    terrible policy that is costing Americans jobs, taxing
    Americans--taxing Americans--and you are actually doing his
    bidding. So I could throw that right back.
        And what I would like to see happen is if we could somehow
    depoliticize this Bureau--I mean, it started out in a way that
    was controversial under Dodd-Frank. It was the thing that kept
    us from having a bipartisan bill in Dodd-Frank. It was this
    agency that kept us from having a bill that would have stood
    the test of time. I think we could have come to an agreement if
    it were not for the way that this was set up, without a board
    and dividing all of us.
        So I would like to see us somehow figure out a way for this
    agency to go forward. There are abuses that happen. There are
    abuses that happen, and the Bureau has done some really good
    things in that regard. It has also, in some cases it feels,
    done some things that were somewhat political. Somewhat. I had
    a good relationship with Cordray. I enjoyed working with him.
        So I would like to ask our nominee, what is it that you can
    do leading the Department to try to cause this whole political
    atmosphere around it to diminish as its leader so that we do
    not have these types of processes every time anything comes up
    regarding this Bureau?
        Ms. Kraninger. Thank you, Senator, for that question,
    because it is obviously critical and central to the discussion
    that is happening here today and has been happening for years
    on the Bureau.
        What I bring to this position and why I was selected by the
    President for this position is precisely that: 20 years of
    Government service, working for common-sense solutions across
    the aisle, working with Members on both sides to support the
    best outcome for the American people. And that is certainly
    what I pledge. This agency clearly needs solid management to
    take it forward, to become part of the financial regulatory
    framework of this Nation as a mature regulator, and that is the
    direction that I would like to take it, if confirmed. And I
    firmly believe that we can continue to push for transparency
    and accountability at the Bureau, again, to really have a clear
    decision-making process that takes into account all of the
    interests that are across the Nation, from consumer groups to
    the financial institutions to all of you here today, to make
    the best decisions and put forward the best actions for the
    American people.
        Senator Corker. So I am Chairman of the Foreign Relations
    Committee, and there are people on our staff that are just
    outstanding, finest people I have ever worked with in my life.
    And they are specialists in what they do, and I call upon them
    to help me in doing what I am doing.
        It is my understanding that you have people like that
    already at the Bureau who would be working underneath you, if
    confirmed, and one of the challenges that people have put to
    you is that you have not been in this area. But it is my
    understanding that you have some very capable people that work
    underneath that are specialists in the areas that the Bureau
    would be dealing with. Is that correct?
        Ms. Kraninger. Yes, Senator, it is. I very much look
    forward to meeting all of them, understanding the details of
    the positions that they have taken, the recommendations that
    they have made, and moving the Bureau forward.
        Senator Corker [presiding]. And if you would, state--I know
    I have got 3 seconds left. Let me say to Ms. Reed, I enjoyed
    seeing you in Uganda. I appreciate the meeting that we had in
    our office. I know that Senator Toomey and others have focused
    on some reforms that they would like to see take place. Many of
    us for years have hoped that the Department itself would
    reform. I hope that we will be able to work with you and others
    to make that happen, and I thank you both for your willingness
    to serve.
        With that, I am the stand-in Chairman, and I call on
    Senator Menendez.
        Senator Menendez. Thank you, Mr. Chairman.
        Ms. Kraninger, you have been nominated to lead the agency
    that is singularly tasked with protecting American consumers
    from predatory financial practices, from seniors to
    servicemembers, students to homeowners. We created the Consumer
    Financial Protection Bureau to be an independent cop on the
    beat for American consumers.
        When we met--and I appreciate you coming by--you told me
    that your management experience at OMB has prepared you for
    this role. So I want to ask you about that, specifically about
    the Administration's response to Puerto Rico. Hurricane Maria
    tragically killed thousands of people, resulted in the longest
    blackout in U.S. history, and left Puerto Ricans without access
    to clean water for weeks. It took FEMA only 2 weeks to send
    Texas almost three times the amount of staff that it sent to
    Puerto Rico more than 2 months later.
        Now, I sent you a letter asking for information about your
    role in Puerto Rico, and I asked for a response by this past
    Monday. You failed to provide one.
        As it turns out, I have emails that demonstrate your
    involvement in the Trump administration's response to Hurricane
    Maria, although these are not emails that you provided to us.
    In my office you told me that not only were you involved in the
    response to Puerto Rico through your oversight of FEMA,
    Treasury, and HUD, but that you oversaw the development of
    disaster aid requests to Congress.
        So let me ask you here, and please provide me some brief
    responses because I think factually we probably both know the
    answers. In the first aid package that Congress passed after
    Hurricane Maria, most of Puerto Rico's aid came in the form of
    a community disaster loan that can only be forgiven at the
    discretion of the Secretaries of Treasury and Homeland
    Security, an unprecedented condition not applicable to Texas or
    Florida.
        Is it true that Puerto Rico had to wait 5 months to receive
    this funding? Yes or no?
        Ms. Kraninger. Not exactly, Senator. The CDL loan was
    actually an unprecedented amount of resources being provided
    that Congress deemed appropriate, making----
        Senator Menendez. Did they wait 5 months to get the money?
        Ms. Kraninger. ----available $1.5 billion----
        Senator Menendez. Did they wait 5 months to get the money?
        Ms. Kraninger. No, Senator, I actually do not believe that
    the Governor has availed himself of this option yet. At the
    same time, it is an unprecedented amount of money that is
    available for that----
        Senator Menendez. Well, let me tell you what happened since
    you seem to have a different recollection. The Administration
    unjustifiably withheld the loan from Puerto Rico, arguing that
    it had a cash balance at the end of 2017 and, therefore, did
    not need the money. I am sure there were cash balances in Texas
    and Florida.
        In November of 2017, Puerto Rico Governor Rossello
    requested $94 billion in recovery funds. In response to this
    request, how much money did you request from Congress?
        Ms. Kraninger. Senator, the request the Administration
    submitted actually included an addendum to the letter that said
    specifically additional funds would be requested.
        Senator Menendez. Can you give me the dollar figure?
        Ms. Kraninger. Senator, it was a specific amount for the
    Disaster Relief Fund that actually applies to all the
    disasters, not just----
        Senator Menendez. And that amount was $44 billion----
        Ms. Kraninger. ----Texas, Florida, and Puerto Rico.
        Senator Menendez. ----was it not?
        Ms. Kraninger. Yes, I believe that is correct. I do not
    have----
        Senator Menendez. And that was to be split among Texas,
    Florida, Puerto Rico, and the U.S. Virgin Islands. Is that
    correct?
        Ms. Kraninger. Yes, Senator. It was also the third request,
    and the note was made that there would be an additional----
        Senator Menendez. In November 2017's request to Congress,
    you requested budget cuts to offset aid dollars provided to
    Puerto Rico. In your extensive disaster management experience,
    does Congress typically require offsets for supplemental
    disaster funding?
        Ms. Kraninger. I am sorry, Senator. Does the Congress
    normally----
        Senator Menendez. Typically require offsets for
    supplemental disaster funding.
        Ms. Kraninger. Senator, my role specifically at OMB is
    certainly to make recommendations. These are the requests that
    the President is making supported by the Office of Management
    and Budget.
        Senator Menendez. Is the answer yes or no? Does Congress
    typically require offsets for supplemental disaster funding?
        Ms. Kraninger. It has been a common----
        Senator Menendez. You and I both know the answer is no.
        Ms. Kraninger. It has been a common conversation in recent
    years, definitely, but again, it is the prerogative of
    Congress----
        Senator Menendez. It is not a common conversation. The
    answer is no. You should know that. You know that.
        Ms. Kraninger. It is a conversation that has been had,
    Senator, and I appreciate your perspective on it.
        Senator Menendez. Did you--amazing. Did you advocate for
    unprecedented policies that would have conditioned Puerto
    Rico's receipt of disaster relief funding on the oversight of
    the island's unelected and unaccountable control board?
        Ms. Kraninger. Senator, as I noted earlier in other
    discussions, I do not think it is appropriate to characterize
    my advice. You do see what the request was that the
    Administration provided to the Congress and that Congress
    considered and that Congress----
        Senator Menendez. In your emails you actually say that you
    see a role for the board. Look, you were a significant
    architect of the Trump administration's response in Puerto
    Rico, which was, at best, botched and incompetent. At worst, it
    reflects the Administration's most insidious views about
    Hispanic Americans. Three-and-a-half million American citizens
    who just happen to call Puerto Rico their home, but they are
    American citizens like you and I are, faced their darkest hour,
    and instead of turning to help them, you pinched pennies. And
    worst of all, I think you treated them like second-class
    citizens. That does not give me the faith that when you are
    going to have to stand up for seniors, servicemembers,
    students, homeowners against some of the biggest financial
    institutions in this country that you will do that. If you
    could not do it for the people of Puerto Rico, I do not know
    how you are going to do it for anybody else. And they are U.S.
    citizens, Ms. Kraninger.
        Senator Corker. Thank you.
        Senator Toomey.
        Senator Toomey. Thank you, Mr. Acting Chairman, and I want
    to thank our two guests today for their willingness to serve.
        Let me start with Ms. Reed. Thanks for coming by my office.
    I appreciated the conversation that we had. And I think it is
    no secret that I have been very concerned and a skeptic about
    Eximbank, a skeptic about its fundamental mission. In my view,
    it is by its nature intrinsically forced to subsidize--it
    forces taxpayers to subsidize certain companies. It distorts
    markets. It necessarily picks winners and losers by virtual of
    its very activity. There have been episodes of waste and fraud
    and abuse. Historically it has not been particularly responsive
    to Congress. And despite all that, I was willing to vote to
    confirm a quorum of board members, provided that a reformer
    like Scott Garrett be leading this organization. Our pro-
    Eximbank Senators preferred not to have a quorum, and so that
    is where we are.
        However, consistent with my interest in seeing reforms, I
    was pleased with your testimony. You emphasized a number of
    areas where you have committed to us that you want to pursue
    reforms, but I would like to just have a specific series of
    questions that I would pose to you and just give me a simple
    answer as to whether or not these are areas that you would work
    with us for reform.
        So, specifically, will you work with me and other Members
    of this Committee and the Senate to increase transparency at
    the Bank to the greatest extent that is practicable without
    divulging confidential business information?
        Ms. Reed. Yes, sir.
        Senator Toomey. Will you work with me and the Committee to
    strengthen taxpayer protections against losses from deals that
    go badly?
        Ms. Reed. Yes, sir.
        Senator Toomey. Will you work with me and Members of the
    Committee to improve protection for domestic companies from
    economic harm that might arise from Eximbank financings with
    foreign competitors?
        Ms. Reed. Yes, sir.
        Senator Toomey. Will you work with us to ensure that
    Eximbank is not crowding out private financing options that
    would otherwise be available but for Eximbank's involvement?
        Ms. Reed. Yes, sir.
        Senator Toomey. And will you work with me and the Committee
    to crack down on bad actors, whether they are employees of the
    Bank or its customers who should not be dealing with the Bank?
        Ms. Reed. Yes, sir.
        Senator Toomey. And will you work with all of us and the
    Administration to meet the statutory requirement that we work
    to reduce the reliance on ECAs globally?
        Ms. Reed. Absolutely.
        Senator Toomey. Great. Thank you very much.
        Ms. Reed. Thank you.
        Senator Toomey. Ms. Kraninger, two things. One, under the
    previous regime, the CFPB occasionally engaged in imposing
    policies that had the effect of being a rule without going
    through the Administrative Procedures Act. They decided to use
    enforcement and guidance to impose their will without following
    the legal requirement that they subject such a proposal to the
    scrutiny that is called for in the APA. There is one case, in
    fact, where it was so egregious that the Senate acted to repeal
    the rule. The indirect auto lending was exactly such a case
    where a guidance was the mechanism they used to impose what
    should have gone through the rulemaking process. Never did. The
    Congress recognized that and has since repealed it.
        My question for you: Will you commit to using the
    Administrative Procedures Act when the CFPB imposes new rules?
        Ms. Kraninger. Absolutely yes, Senator. It is critical to
    the process.
        Senator Toomey. Thank you.
        Section 1071 of the Dodd-Frank Act unfortunately instructs
    the Bureau to collect and compile data on small business
    lending. I say ``unfortunately'' for a number of reasons, not
    the least of which is this is meant to be a consumer bureau,
    not a business bureau. But, nevertheless, the law says what it
    says, and I understand you have to comply with the law.
        My understanding is that Section 104 of S. 2155, which was
    recently passed and signed into law, addresses the challenge of
    overly intrusive data collection with respect to small mortgage
    lending. So there is some relief built in there. But it is
    narrow. It is narrow. It applies only to the small mortgage
    lenders.
        My understanding is that Section 1071 of Dodd-Frank does
    allow the Bureau to make exceptions to small business data
    collection. So my question for you is: In implementing and
    complying with this part of Dodd-Frank, this requirement, will
    you commit to working to minimize the undue cost burden,
    administrative aggravation for small business compliance with
    this part of the law?
        Ms. Kraninger. Senator, I can absolutely commit to you that
    the law will be carried out, and the authority given to the
    Bureau to tailor that narrowly is certainly something that I
    will look at, and I can pledge to you I will. This is an
    ongoing action that the Bureau is looking at, and it is an
    area, to your point, the law requires the Bureau to act. So I
    do not want to prejudge it. At the same time, I appreciate
    where you are coming from, and I understand the need to limit--
    --
        Senator Toomey. And just very briefly, because I know I am
    out of time, but can you confirm, do you agree with my
    interpretation that 1071 is the only respect in which Dodd-
    Frank mandates the Bureau to deal with small business?
        Ms. Kraninger. Senator, it is very clearly one, and I have
    not read all of the enumerated consumer laws. As you know,
    there are many. At the same time, I absolutely believe that
    there is a limited intent for the Bureau to be engaged in small
    business oversight or engagement there. So that is something
    that should be limited.
        Senator Toomey. Thanks, Mr. Chairman.
        Senator Corker. Thank you, Senator Toomey.
        Senator Tester.
        Senator Tester. Thank you, Senator Corker. I appreciate the
    recognition. Thank you, both of you, for being here today.
        I am going to start out with you, Ms. Kraninger. It is no
    secret that Mr. Mulvaney is no fan of the CFPB. That aside,
    would you say that he has done a good job in his role as Acting
    Director?
        Ms. Kraninger. Senator, I would say that the Acting
    Director has focused on two priorities: one----
        Senator Tester. No, no, no, no, no. Just, please, I know
    how to filibuster, you know how to filibuster. Just answer the
    question.
        Ms. Kraninger. I understand.
        Senator Tester. Has he done a good job?
        Ms. Kraninger. Senator, he is my current boss who I respect
    greatly, and he has actually been focused on implementing the
    law. From that standpoint, I would say yes.
        Senator Tester. OK. So one of the things you had in your
    four points that you were going to bring to the CFPB, I want to
    focus on the second one: work closely with other regulators and
    aggressively take actions against bad actors. I think that is a
    noble thing to do.
        Mr. Mulvaney has pulled back the payday lending rule. He
    has eliminated the Office of Students and Young Consumers. He
    has pulled back the prepaid accounts rule. And he has done more
    things than, quite frankly, I have got fingers. OK? Did you
    support him in those then? Do you think those are the right
    actions to take? Because it goes, in my opinion, contrary to
    your number two plank of what you are bringing to the agency.
        Ms. Kraninger. I understand your interest. I will attempt
    not to filibuster, Senator. I have to say that I will take
    aggressive action, if I am confirmed, and I do believe that the
    Acting Director, you know, has information that I do not have
    available----
        Senator Tester. Do you plan on reinstating, for instance,
    the payday lending rule?
        Ms. Kraninger. Senator, it is under active consideration,
    and from that vantage point, it is not----
        Senator Tester. OK. Are you going to recommend that they
    reinstate the payday lending rule?
        Ms. Kraninger. I think it is important to let the process
    happen on this, because it is actively under reconsideration,
    and so it is not appropriate to comment. I understand your
    interest in it, sir.
        Senator Tester. So, look, you have probably got the votes
    to get confirmed, but I have got to tell you that I have
    listened to the questions that have been asked here today, and
    you can answer the questions. You really can. All you have got
    to do is answer them. You are going to be the head of this
    agency. You are going to be leading this agency. Your
    recommendations are going to count for something. And so it
    would be really helpful for me to know, if I am going to vote
    for you or not vote for you, where you are at--where you are
    at, not the people under you.
        OK. Let me ask you another one. One of the other things
    that Mulvaney did is he appointed political folks to track
    career folks within the agency, the same folks that you said
    that you are going to be looking forward to working with. Do
    you intend to keep those political folks on board within the
    agency if and when you become Director of the CFPB?
        Ms. Kraninger. Senator, I am going to take every staff
    member individually and have a conversation with them to
    understand what they have been working on and what they would
    like to continue to work on. But I have not prejudged having
    political or career staff continue. I think it is appropriate
    to give them that opportunity to have the conversation.
        Senator Tester. OK. So you oversaw the Treasury Department
    in your position at OMB, correct, as one of the seven agencies
    that you oversaw?
        Ms. Kraninger. Yes, Senator.
        Senator Tester. OK. Earlier this week, the Treasury
    Department and the IRS announced that--it was one of the
    swampiest decisions that I, quite frankly, have ever seen. They
    have made a decision to allow for these (c)(4)s not to have to
    report money that they have received, nonprofits, allowing
    donations to those (c)(4)s over $5,000 not have to be reported
    to the IRS. Do you agree with that decision?
        Ms. Kraninger. Senator, I understand that they published
    that decision. I can tell you I did not have a role in it.
        Senator Tester. I know, but do you agree with that
    decision? Whether you had a role or not, do you agree with that
    decision?
        Ms. Kraninger. Since I have not read the law in that area
    and gotten into detail----
        Senator Tester. So it is going to allow these organizations
    not--to basically hide where they got their money. Is that OK?
        Ms. Kraninger. Senator, I think they looked at the law and
    the requirements and came forward with the policy decision.
        Senator Tester. OK. So let me ask you this: The number one
    thing that you are going to bring to the Bureau is transparency
    and accountability. Can you tell me how that decision, just
    sitting on the outside looking in, whether you have oversight
    of that agency or not, the Treasury Department, how you could
    actually say, ``You know, I do not have an opinion on it,''
    when it deals exclusively with transparency?
        Ms. Kraninger. And, Senator, I can tell you at the Bureau
    that I am committed to that.
        Senator Tester. So let me ask--I am not even going to ask.
    I am just going to make a statement. I liked your document that
    you gave us that was your opening statement. It said a lot of
    good things that I agree with: protecting data, we could get
    into Equifax, I am not sure we would get any answers.
    Accountability for actions, I like that. Transparency, working
    closely, holding bad actors--but, by the way, your answers did
    not reflect those values at all.
        Thank you, Mr. Chairman.
        Chairman Crapo [presiding]. Senator Tillis.
        Senator Tillis. Well, welcome. Before I get into some of
    the questions primarily toward Ms. Kraninger, Ms. Reed, I want
    to talk a little bit about what we--thanks to both of you for
    coming to the office, but I want to talk a little bit about why
    I believe the Eximbank needs to become functioning again. I
    think that you in your opening testimony talked about an
    increased number of equivalent agencies in the global markets.
        I for one think that we have got to get away from this
    either/or proposition with Eximbank and start talking about the
    reality that if we do not have this in our toolkit, when we are
    competing in the global markets, that we disable ourselves much
    the same way a State would get out of economic incentives. Do
    you agree with that?
        Ms. Reed. Yes, sir.
        Senator Tillis. Do you also agree that there may be things
    that could make the Eximbank less politicized if we worked on
    improving that but for the involvement of the Ex-Im Bank, the
    transaction would not necessarily go the positive way? And can
    I get your commitment to come back either to my office or
    before this Committee to tell us what that would look like so
    that hopefully we can get to a better place and better
    certainty for the long-term interest of the Eximbank?
        Ms. Reed. Absolutely.
        Senator Tillis. Thank you. Thank you for your service. I
    look forward to supporting your nomination.
        Ms. Kraninger, there are a lot of people that asked a lot
    of questions and gave you a limited amount of time to answer.
    Are there any things that you would like to respond to here
    before I ask you a couple of questions?
        Ms. Kraninger. Thank you, Senator, for that opportunity. I
    recognize that Senator Tester wanted to hear a little bit more
    about my views. I can certainly talk about the challenges with
    the payday lending arena.
        I do take the point of the conversation that I have had
    with Senator Brown on the challenges for hardworking Americans
    out there, and I think what would be helpful is continued
    competition in the small dollar lending space. So I would say
    that Comptroller Otting's action in trying to work with
    traditional banks to bring additional products and services to
    the market is something that would be useful. But I certainly--
    it is a difficult position to be in because it is on the
    regulatory docket for the agency. I know that. And it is
    something that cannot be prejudged, and so I respect the
    process there. But I certainly have spent some time looking at
    this issue and look forward to further getting into it.
        Senator Tillis. I think in the opening testimony the
    Ranking Member talked about folks on our side of the aisle who
    have been working hard to defang the CFPB, and I am one of
    those because I think if you look up ``defang'' in the
    dictionary, it has something to do with taking the fangs out of
    a snake to make it less poisonous or less threatening. And in
    my opinion, the CFPB has a great title--Consumer Financial
    Protection Bureau, or the new title now--but the reality is I
    think that it is the first agency of its kind that is not
    accountable, arguably, to anybody, because after you get
    confirmed, for a period of time, just like your predecessor,
    you do not even really answer to the President. You certainly
    do not answer to the Congress.
        When Mick Mulvaney, Director Mulvaney, was here, I was
    struck by his goal of trying to convince us that they should be
    an agency that is more accountable to the President. Do you or
    do you not share Director Mulvaney's view that this is an
    agency that is sort of unlike anyone with great power and not
    accountability and that that is not good for any area of
    Government?
        Ms. Kraninger. Clearly, Senator, the Congress through the
    Dodd-Frank Act gave the Bureau incredible powers and incredible
    independence from both the President and the Congress in its
    structure. I have noted that my focus is on running the agency
    as Congress established it, but certainly working with Members
    of Congress, I am very open to changes in that structure that
    will make the agency more accountable and more transparent.
        Senator Tillis. Well, for those who are not going to
    support your nomination, I for one think that this is a great
    time for us to come together and actually move that
    accountability and funding back into Congress so that they
    could actually have some say, because the fact of the matter is
    you, like Mick Mulvaney, do not really have to care--but for
    maybe your interest in democracy and respect for Congress, you
    do not have to care one bit about our opinions about your
    activities. And unless we get to a point where it is
    accountable, becomes accountable to Congress, that is going to
    continue. And I for one hope that you go out there and you work
    on clawing back regulations that on the surface look like they
    are passed for protection of the consumer, but in many cases
    they are harmful ultimately to the consumer, either in terms of
    cost or access to capital.
        I look forward to supporting your nomination. I also
    welcome your family and friends here. The nominees are going
    just fine, and I look forward to supporting both of you on the
    floor.
        Chairman Crapo. Senator Warner.
        Senator Warner. Thank you, Mr. Chairman. And I want to say
    welcome to the witnesses. Ms. Reed, I look forward to
    supporting you. You are a lucky witness this morning since your
    colleague is receiving most of the attention.
        I am sorry Senator Corker is no longer here. I was here at
    the start of Dodd-Frank and CFPB. Senator Corker and I worked
    very, very closely together. If my memory serves, the original
    proposals around CFPB were to set it up as more of a
    traditional agency with traditional oversight. But it was then
    some Members of the minority's position that they did not want
    to create a new box, a new entity, so it was put in this, I
    agree, rather unique framework inside the Fed with that certain
    funding stream. But I think the history would demonstrate that
    that was how the rather unique aspects of the CFPB came to be.
        Ms. Kraninger, I want to drill down in a couple specific
    areas. I think in every aspect of the CFPB work, it needs to
    make sure that you use data to analyze problems and really make
    data-driven decisions rather than agenda-driven decisions.
    Senator Warren and I submitted a comment to the CFPB expressing
    our deep concern about Director Mulvaney's skepticism of data
    collection by the CFPB, and I think he has expressed an ongoing
    hostility toward data collection and the use of data. As an
    example, he froze collection of personal data for nearly 6
    months, got rid of a planned survey on debt collection
    disclosures. And I am deeply concerned that one of your four
    priorities was to limit data collection to what is ``needed and
    required by law.'' And I know as well--and I have been somebody
    who has favored cost-benefit analysis, but how do you do a
    cost-benefit analysis that is going to be accurate and adhere
    to fact-based if you are not able to do appropriate data
    collection to influence your decision? How can we be assured
    that it is then not going to be a political-driven agenda
    rather than a data-based agenda?
        Ms. Kraninger. Senator, I appreciate the question. I am
    absolutely committed to data-driven decision making, and should
    I be confirmed, that would be a focal point at the Bureau. I
    take your point, but I think again, to the extent that it is
    supporting that decision making, the data collection would be
    needed and required.
        I also think it is important to distinguish here between
    the data that comes through the requests for information that
    are out to the public. There are a number of sources of
    evidence that come beyond the entities that the Bureau is
    supervising directly, and so ensuring that consumer groups have
    the opportunity to respond, to provide information, using the
    benefit of a lot of the academics that are there, looking at
    this area----
        Senator Warner. I would just simply say, though, that if we
    are going to do a rulemaking on debt collection practices
    without talking to those people who have been targets,
    customers, consumers, users of those debt collection services,
    I do not know how you can reach a conclusion.
        Now, I come and can live with the Ranking Member and many
    on this side. We do not always agree. I generally come with a
    pro-business bias. I have been in business longer than
    politics. But I have got to tell you, I think the power in most
    business-consumer relationships has shifted away from the
    consumer toward business. And I see this particularly, as we
    discussed a little bit, in the circumstances around the credit
    reporting agencies. You and I have no option to choose to be
    customers or not of credit reporting agencies. And I am very
    concerned not only in credit reporting but as we move into
    increased areas around social media and elsewhere, I am not
    sure that even a relatively informed consumer can simply sign
    away all of their rights with this growing imbalance where the
    business has all the information, all the data, all the tech
    tools, and you are stuck with a ``Click here, I agree,'' in
    print that no one could read, or even if you could read, you
    could not necessarily understand.
        Are you concerned about this imbalance between business'
    ability to collect consumers' data knowingly, and oftentimes
    unknowingly? And what do you think the CFPB should do to help
    protect consumers in this growing arena?
        Ms. Kraninger. Senator, I appreciate the question and
    enjoyed the conversation that we had. Specific to the credit
    reporting agencies, just to take that, because that is a
    critical area where the Bureau is spending a significant amount
    of time, I look forward to the results of the Equifax
    investigation to understand what is happening there, to look at
    what the Bureau staff has found in terms of the concerns, and I
    do think that the customer relationship there is really between
    the agencies and the financial institutions. So ensuring that
    the consumer is protected in that situation and that they are
    really limiting the information they are collecting to what is
    appropriate and that they are protecting it and that the
    consumer has a measure of control and involvement in that going
    forward is certainly something that makes sense to me. And I
    look forward to getting into that more with the Federal Trade
    Commission and the Bureau staff, if confirmed.
        Senator Warner. My time has expired. But, Mr. Chairman, I
    just wanted to note for the record I appreciate your interest
    in this subject, the fact that we have had a couple of
    hearings. I have got to tell you, if this Committee takes up
    any other legislative activities this year, it is going to be
    my intent to make sure that credit reporting, appropriate guard
    rules and the fact that it is a year after Equifax and still
    nothing has happened, that is going to be at the top of my
    priority list, and I hope we will be able to work together.
        Thank you.
        Chairman Crapo. It is a high priority for me, too, as well
    as data collection in general, as I have discussed with several
    of you, and I hope that we can prioritize that and make
    progress.
        Senator Warren.
        Senator Warren. Thank you, Mr. Chairman.
        So one thing consumers need in a CFPB Director is someone
    who is willing to stand up to powerful people on behalf of
    those who do not have power. And that is why I want to focus on
    the Trump administration's child separation policy.
        Since March of 2017, you have been the head of the General
    Government Programs at the Office of Management and Budget. Is
    that right, Ms. Kraninger?
        Ms. Kraninger. That is correct.
        Senator Warren. It is an important job. The General
    Government Programs Division at OMB is in charge of overseeing
    both the Department of Japanese and the Department of Homeland
    Security. Is that right?
        Ms. Kraninger. Yes, Senator.
        Senator Warren. And according to the disclosures you
    submitted to this Committee, you ``serve as OMB's principal
    policy official'' for issues related to the departments and
    agencies you oversee. Is that right?
        Ms. Kraninger. Yes, Senator.
        Senator Warren. So the Justice Department and Homeland
    Security are the two agencies most responsible for taking
    children away from their parents at the border, and you oversee
    policy issues at both agencies. But for a month now, you have
    refused to respond to Ranking Member Brown's and my request for
    information for documents relating to your role in child
    separations. And when we met in my office last week, you
    refused over and over to give me a straight answer about your
    role.
        So today you have given a very lawyerly and limited answer.
    You are dodging. The answers have also been contradictory. You
    have said you have no role in setting the policy, but you also
    cannot describe the advice you gave on the policy, which means
    it raises a question, which is that you had no role or you had
    a role and you cannot describe it.
        So I am going to ask you again under oath: Were you
    involved in any way in developing or implementing the policies
    that led this Administration to take thousands of children away
    from their parents at the border?
        Ms. Kraninger. Senator, I had no role in setting the
    policy. As we discussed, I was unaware----
        Senator Warren. Please answer my question. It was
    developing or implementing.
        Ms. Kraninger. I had no role in developing it in terms of
    its announcement by the Attorney General, so I was not aware of
    that----
        Senator Warren. So you did not help the Attorney General
    announce it, but otherwise, did you help develop or implement
    this policy?
        Ms. Kraninger. Subsequent to the Attorney General's
    announcement, there were meetings within the Administration on
    the general topic of the implementation, and, again, the Office
    of Management and Budget does actually participate----
        Senator Warren. So is that a yes?
        Ms. Kraninger. ----in those meetings.
        Senator Warren. You were involved? That is a yes?
        Ms. Kraninger. Senator, again, I do not want to
    characterize the advice, as I noted----
        Senator Warren. Well, Ms. Kraninger, I am asking you a
    pretty straightforward yes or no question, and I will remind
    you you are under oath, and lying to Congress is a crime. I
    will also remind you that many of the documents I have
    requested about your role in this policy could eventually
    become public under the Freedom of Information Act.
        So let me ask again the specific question: Were you
    involved in developing or implementing the policies that led to
    children being taken away from their parents at the border?
        Ms. Kraninger. Senator, it is difficult to separate the
    advice----
        Senator Warren. I will take that as a yes then.
        Ms. Kraninger. ----and so as I said, I will not
    characterize the advice that was provided on the analysis or
    otherwise----
        Senator Warren. I am not asking you to characterize. I
    asked you a simple yes or no question. According to reports, in
    some cases the Trump administration is not sure which children
    belong to which parents. As of Monday, the Administration had
    not identified the parents of 71 separated children, which
    means right now they cannot be reunited.
        DHS is the agency that took parents away from their young
    children. Did you work with DHS to create a plan for eventually
    reuniting these children with their parents?
        Ms. Kraninger. Senator, again, I cannot characterize my
    advice, but as we also discussed, since I was nominated to this
    position----
        Senator Warren. I asked just did you----
        Ms. Kraninger. ----I have not been involved----
        Senator Warren. ----work with them on a plan. I did not ask
    what the plan was, what advice you gave. Did you work with them
    on a plan to reunite these children who were taken away from
    their parents?
        Ms. Kraninger. I understand the question, Senator, but it
    becomes a slippery slope in terms of characterizing the advice
    that was provided or the analysis or the questions that were
    raised. Again----
        Senator Warren. No, it is not a slippery slope----
        Ms. Kraninger. ----I do not want to characterize any of
    that.
        Senator Warren. You do not want to characterize because you
    do not want to admit that you had something to do with this.
    You know, this was a policy that was designed to traumatize
    children and families as a way of scaring them away from the
    border, even if they were seeking asylum, even if they were
    fleeing death threats, gang violence, rape, domestic abuse.
        White House Chief of Staff Kelly said that the whole point
    of this was ``to be a tough deterrent.'' The American Academy
    of Pediatrics says that being separated from their parents for
    weeks or months can cause these children irreparable, lifelong
    physical and psychological harm. Do you think that purposefully
    inflicting that on innocent children is immoral?
        Chairman Crapo. And please make your answer brief.
        Ms. Kraninger. Senator, I think there are many
    heartbreaking stories that appear in the news every day from
    the conversation we had about American families, hardworking,
    who are affected by----
        Senator Warren. It is a simple yes or no question. Do you
    believe that it is immoral to set up a plan whose deliberate
    intent is to inflict harm on children?
        Ms. Kraninger. Senator, it is not appropriate for me to
    provide my personal opinion and internal deliberations and
    discussions on this matter.
        Senator Warren. Almost every Member of this Committee,
    Democrat and Republican, has denounced this policy. Even
    President Trump, when he signed the Executive order ending
    child separation, said, and I will quote: ``I did not like the
    sight or the feeling of families being separated.'' But you
    cannot have an opinion on this? You know, I went to the border
    last month. I met a mother who was torn away from her 7-year-
    old little boy in the middle of the night. She could not stop
    crying. All she could say over and over and over is, ``I never
    even had a chance to say goodbye.'' She had not seen her little
    boy for weeks. She had no idea where he was.
        You see the videos of some of these children being returned
    to their parents after long separations. They are dazed. They
    are unsmiling. They are dirty. It is like the life has been
    sucked out of them. These are innocent children who may be
    scarred forever by this policy. It is fundamentally immoral,
    and you--you--were part of it, Ms. Kraninger. It is a moral
    stain that will follow you for the rest of your life. And if
    the Senate votes to give a big promotion to you after this,
    then it is a stain on the Senators who do so.
        Chairman Crapo. Senator Cortez Masto--oh, excuse me. I
    apologize. I did not see Senator Moran come in. Senator Moran.
        Senator Moran. I think Senator Rounds is first.
        Chairman Crapo. Oh, excuse me. Senator Rounds.
        Senator Rounds. Thank you, Mr. Chairman.
        Mr. Chairman, what I would like to do is, once we have got
    the noise cleared up here, we will turn around and we will go
    back and ask some questions of both of our two witnesses. Thank
    you.
        Let me just begin with Ms. Reed. Your role coming in as a
    chairperson is to make certain that this particular
    institution, this Bank, is capable of competing with other
    similar type institutions from around the country and providing
    services so that we can again properly export to other
    countries. I think some people think that that is
    inappropriate, that a Government would provide a service. I do
    not. I think that is appropriate that we be competitive. Can
    you share very briefly your thoughts with regard to the
    appropriateness of competing with other countries and providing
    our businesses with that same type of service so they can
    compete?
        Ms. Reed. Absolutely, sir. Thank you. As I mentioned in my
    opening statement, if we are not at the table, we are
    unilaterally disarmed, and our competitors will take those jobs
    that should be U.S. jobs through their own ECA programs. And I
    want to be sure in this time when we have 109 other ECAs
    competing against the United States that we are there. I think
    that is so important.
        I know that the Export-Import Bank has a very specific
    role. It is a tool in the toolbox. Dan Runde with the Center
    for Strategic and International Studies (CSIS) published an op-
    ed in The Hill earlier this week, and he lays out the world of
    China; you know, they are using their Export-Import bank, along
    with many other tools, to be present through their Belt and
    Road policy all around the world. And we need to be there not
    only for economic security but also because we need to be there
    for national security reasons. The President says economic
    security is national security, and so Ex-Im is part of that.
    But we need to be there for our workers. I want our workers
    having these jobs.
        Senator Rounds. You know, I was very pleased with the
    response that you gave to Senator Toomey. I think Senator
    Toomey had expressed concerns that the Eximbank has in the past
    picked winners and losers. I was very happy to hear you comment
    on the fact that you will work with us to make certain that
    some of those things that may have occurred in the past with
    regard to picking winners and losers would not be in the
    future, so thank you for that. I appreciate that.
        Ms. Kraninger, first of all, let me just--I understand that
    sometimes we run out of time here, and there are some things
    which we, as Senators, we try to get a lot of questions in in a
    short period of time. But sometimes that also means that we do
    not give you the opportunity to clearly lay out your thoughts
    and to answer questions. I think that has occurred today. And,
    in fact, you have been the object so that individuals here that
    have disagreements with the Administration's policies and their
    attempts to enforce border security and so forth, and they have
    used you as the object. I would like to give you an opportunity
    to perhaps more fully answer any questions that you think you
    may not have had the opportunity to answer with regard to any
    of your activity at OMB and the responsibilities that you had
    at OMB, recognizing that it may in many cases just simply be to
    provide advice.
        Would you like to share with us a little bit, perhaps more
    fully answer the questions that some other Members really were
    interested in but probably did not have enough time to allow
    you to answer?
        Ms. Kraninger. Thank you, Senator. I appreciate that
    opportunity. The Office of Management and Budget is truly a
    unique organization in the Government because it has such a
    broad reach into all of the activities across Government. It is
    kind of a microcosm. And my portfolio is the broadest. So the
    level of engagement that I have in any particular issue or with
    any particular department or agency does vary substantially. So
    the question with respect to the IRS rule, I was aware of it
    happening. I know that my staff reviewed it. But, again, I did
    not have a role in developing that.
        With respect to the response to, again, the horrible
    disasters last fall, because there was clear need for
    additional resources, the Office of Management and Budget was
    very engaged. And, in addition, with respect to Puerto Rico,
    the Treasury Department had a deep role working with the
    Government, with the oversight board that was established by
    Congress to look at the future of Puerto Rico. And so that is
    something that, again, there have been many meetings on.
        I would also like to note that there are many hardworking
    men and women across the Administration, at the State level, in
    the private and nonprofit sectors that were very engaged in the
    hurricane response. And so it is an honor to support them and
    look at the resource needs that were brought forward and to
    submit to Congress the resources that we believe were fully
    justified and for Congress to consider that.
        Senator Rounds. Let me just--and I know my time has
    expired, but I would ask the Chairman for just a little
    leniency after the last questions that were asked, just to
    clarify this. You are responsible for over $250 billion in
    budgetary resources for 7 Cabinet departments and 30 other
    Federal agencies, including the Treasury Department, Department
    of Housing and Urban Development, the Bureau, and all of the
    financial regulators. You also serve as OMB's principal policy
    official for issues related to those departments and the
    agencies.
        I just get the sense that somehow with the huge number of
    items that are in front of you, how much do you get into the
    specific details? And do you have the opportunity to come back
    in and say, ``Wait a minute, I disagree with a particular
    policy, I can stop it, or I can change it''? Or do you offer
    advice?
        Chairman Crapo. And, again, please keep your remarks brief.
        Ms. Kraninger. Thank you, Senator. It is definitely an
    opportunity to offer advice. The involvement level really does
    vary substantially based on the President's priorities, the
    Director's priorities, the agency heads' priorities, how much
    authority they have on their own.
        Senator Rounds. One last item on it. Is your advice always
    taken?
        Ms. Kraninger. Senator, I wish that it were, but, no, my
    advice is not always taken. At the same time, I am also
    fallible. But I offer my best advice based on the information
    available.
        Senator Rounds. Thank you.
        Ms. Kraninger. Thank you.
        Senator Rounds. Thank you, Mr. Chairman.
        Chairman Crapo. Thank you.
        Senator Schatz.
        Senator Schatz. Thank you, Mr. Chairman. Thank you, Ms.
    Kraninger and Ms. Reed. Thank you for your willingness to
    serve.
        I just want to follow up on the line of questioning around
    family separation. I understand you cannot characterize the
    advice you gave, but I am wondering if we can get some sense of
    what categories they were in. Was it legal advice? Was it
    compliance advice? Was it advice related to execution? Because
    I think if--I am not sure I agree with you about deliberative
    product. I am not sure I agree with you about the sort of vague
    assertion of--I do not know if it is privilege that you are
    asserting or a personal judgment that you are making or on the
    advice of counsel, and maybe we can get into that. But let us
    set that aside for a moment. I think it is fair for us to know
    kind of broadly what you did, not how you advised people, not
    how you executed, but were you advising on implementation? Were
    you advising on compliance? Were you providing legal counsel?
    Were you providing political advice? Can you just characterize
    what you were doing?
        Ms. Kraninger. So, Senator, with respect to the Office of
    Management and Budget's role, which does characterize my role,
    the Director's role, myriad meetings talking about the agencies
    as they were executing the policy, and we do have at OMB a role
    for providing perspective on the budgetary resources necessary,
    any regulatory issues to be addressed----
        Senator Schatz. Why the third person here? Like, ``we have
    a role''? Every time we ask you about what you did, you say,
    ``OMB has a role,'' and then it becomes this kind of
    description of this faraway bureaucrat. It was you, and I am
    just asking you so that we can establish a little trust. You
    can just sort of characterize what you talked about, not to
    describe the contents of what you talked about but, broadly,
    were you giving legal advice? Were you giving political advice?
    Let us start with that. Were you giving legal advice?
        Ms. Kraninger. Senator, if I could respond to the point you
    are making because it goes to the heart of the matter. My
    conversation with Senator Rounds, the reason why I am saying
    the Office of Management and Budget is because, as Senator
    Warren and I discussed in her office, I am responsible for my
    staff.
        Senator Schatz. No. I get that.
        Ms. Kraninger. So I do have staff involvement. I am also
    providing advice to the Director----
        Senator Schatz. Ms. Kraninger, I do not have a lot of
    time----
        Ms. Kraninger. I am sorry, Senator.
        Senator Schatz. Did you give legal advice?
        Ms. Kraninger. Senator, it is not appropriate for me to
    give legal advice, really. It is the purview of the Office of
    Management and Budget to weigh in on regulations, budgetary
    resources, those kinds of things.
        Senator Schatz. Weighing in on regulations, what does that
    mean?
        Ms. Kraninger. So, for example, anything that involves data
    collection, requires notice under the Privacy Act, whether it
    is a system of records, notice, submission, or a data
    collection or----
        Senator Schatz. So compliance--can you just please, like
    rather than me playing 20 Questions with you, can you please
    try to characterize your role in this without running afoul of
    whatever principle that you articulated earlier, and in as
    simple and personal terms as we can get to where you can say,
    ``This is basically what I did for them. Now I am not going to
    tell you exactly how I advised them or how I''--``or get into
    deliberative product.'' I understand your position on that. But
    can you not characterize anything more than OMB generally does
    this and that would apply to this situation, too?
        Ms. Kraninger. Senator, I have said that I had no role in
    setting the policy----
        Senator Schatz. Yeah, I got that.
        Ms. Kraninger. ----and that there----
        Senator Schatz. So what did you do?
        Ms. Kraninger. ----had been--there were a number of
    meetings on immigration and border security policy, writ large,
    that I participated in, that I supported the Director and the
    Deputy Director in their participation, and that my staff
    participated in and then came back and told me the nature of--
    --
        Senator Schatz. I have to tell you----
        Ms. Kraninger. ----the discussion.
        Senator Schatz. ----I do not do hearings so I can put a
    clip up on YouTube. I do not operate that way. And I am trying
    to get an answer from you, and I just cannot. And it is
    maddening because this is not a trivial aspect of your basic
    qualifications for the job. You are coming in and asserting
    that you are a manager, and you cannot characterize anything
    that you are doing as a manager.
        Let me ask you one final question. Is your position, which
    is that that would get into deliberate product, is that on the
    advice of counsel?
        Ms. Kraninger. Senator, the documents that were requested
    in the letter is something that I have shared with the
    appropriate officials, and that includes the Office of
    Management and Budget General Counsel.
        Senator Schatz. OK. But did counsel give you advice and
    tell you not to answer these questions?
        Ms. Kraninger. Senator, we certainly had a lot of
    preparation for this hearing and discussion about the right
    answers----
        Senator Schatz. Yeah, so did----
        Ms. Kraninger. ----but I will say----
        Senator Schatz. Did you get legal advice?
        Ms. Kraninger. ----my answers are my own.
        Senator Schatz. Did you get legal advice?
        Ms. Kraninger. Not per se legal advice, sir. I am not
    asserting privilege. It is not for me to do that certainly in
    this position, but I am saying that I want to preserve the
    deliberative process and that that is an important thing to
    preserve, similar to conversations that many of you have had or
    I have had with Senators that I have worked with. It is
    important to keep those discussions----
        Senator Schatz. And is that your personal judgment or is
    that the--is that on the basis of advice from either the GC or
    from the White House?
        Ms. Kraninger. Senator, it is fair to say that there were
    discussions in preparation for this process that I did have
    others weigh in in terms of giving me advice on how to respond.
    But my responses are my own.
        Senator Schatz. Thank you.
        Chairman Crapo. Senator Moran.
        Senator Moran. Mr. Chairman, thank you very much. Thanks to
    both of our nominees for being with us today. I look forward to
    working with both of you should you be confirmed in the
    capacities that you have been nominated to fill.
        Ms. Kraninger, I would start with you. I want to let you
    know how much I appreciate the working relationship that you
    and I have had in your capacity here on the
        Appropriations Committee in the U.S. Senate as well as your
    work at the Office of Management and Budget and indicate to you
    that I appreciate the diligence with which you have pursued my
    inquiries and issues that I raised in both of those capacities.
    The thoughtful and articulate way that you communicated with me
    about responses and the lack of partisanship in the issues that
    we were dealing with was clearly demonstrated to me, and I am
    grateful for your professional approach to the way that you
    conducted your work, at least in the experience that I have had
    with you over the last several years during my time as United
    States Senator.
        My observation about the hearing today on your nomination
    reminds me of the first piece of legislation that I introduced
    as a United States Senator related to financial services and
    banking, and that was, among other things, the belief that this
    entity should be governed by a board. While there seems to be
    relish in having the opportunity to question you as a potential
    Director of the Consumer Financial Protection Bureau, maybe we
    would enjoy it if we had three or four or five more
    opportunities to do so in having other people confirmed. And
    the point, said somewhat with a smile, that we would want to go
    through this four more times, but the point I would make is
    there is a diversity of views on this Committee and in this
    country about the role of a Consumer Financial Protection
    Bureau. I am of the view that Republicans made a significant
    error, at least in some, in saying we are going to repeal Dodd-
    Frank and end its reign, and the reaction, unfortunate
    reaction, to that was many Democrats who said, ``You are not
    going to touch the issues associated with Dodd-Frank.'' So we
    put ourselves in corners that then caused us to be unable to
    solve problems that clearly existed as a result of the passage
    of Dodd-Frank with two sides saying, ``We are going to do this,
    and we are not going to let you do this.'' It did not allow us
    to find a middle ground in very many instances, at least until
    recently, in which we could make some improvements or changes
    in Dodd-Frank.
        One of the changes that I have long promoted is that a
    board or a commission that would oversee a Consumer Financial
    Protection Bureau would make sense. I am not going to ask you
    your opinion about that, but I would raise this with my
    colleagues to suggest not only would it give us the opportunity
    to have more input with those who would be in charge, members
    of that commission of the Consumer Financial Protection Bureau,
    but it would also allow us to better reflect and perhaps avoid
    the swings that may occur from one Administration to another in
    the approach that we have had--the approach that CFPB has had
    in regard to the regulatory world of protecting consumers.
        I would indicate that it would be valuable to me--and I
    would allow you to respond to this, but it would be valuable to
    me to confirm what I would expect you to confirm, that you will
    operate in your capacity, if confirmed, in a very transparent
    and open way so that Members of Congress have a better
    opportunity to influence and to make points to you that I
    sometimes I felt I had with one of your predecessors in his
    Administration, his directorship of the Bureau. And I would
    also make the point that those who are being regulated could
    user greater transparency because I think in too many instances
    rulemaking was not accomplished and, therefore, the rules were
    unknown, and you became--what was the rules of the road became
    known only once there was an enforcement action.
        And so I would give you the opportunity to confirm to me,
    first of all, how you would operate in a transparent way with
    me and my colleagues as Members of the U.S. Senate, and,
    second, if you have thoughts about how we make certain that
    those who you are regulating know what the regulations are
    before they suffer the enforcement action that often resulted
    in a fine.
        Ms. Kraninger. Absolutely, Senator. Thank you so much for
    your comments and for your perspective on this. I completely
    agree that the Bureau--it is a priority for the Bureau to be
    transparent and accountable, that I am committed to working
    with members of both sides of the aisle in Congress to move the
    Bureau forward in that kind of manner. And in terms of the, you
    know, so-called regulation by enforcement that many have been
    concerned about in terms of the prior approach to the Bureau, I
    completely agree that it is critical to have clear rules so
    that the lenders and creditors and the consumers themselves
    know what the rules are and that they are not somehow told
    after the fact that they broke a rule they were not even aware
    of or that it had somehow changed without any proper notice and
    comment process to really understand the impacts and the
    opportunity to tailor, as I have discussed with many other
    Members. So I completely agree that that is not appropriate and
    is something that I would not engage in.
        Senator Moran. I appreciate your response. And, Ms. Reed, I
    have run out of time. I would tell you I look forward to
    working with you. I have been on the Banking Committee long
    enough to remember the days in which you would have been a
    controversial nominee, and I am glad to see that Eximbank is
    back in a position in which we can move forward and protecting
    the competitive interests in a global economy of United States
    businesses but, more importantly, those who work for United
    States businesses. Thank you, ma'am.
        Chairman Crapo. Senator Cortez Masto.
        Senator Cortez Masto. Thank you. Welcome. Congratulations
    on both your nominations. And let me just say thank you to both
    of you for taking the time to visit with me and answer my
    questions. I really appreciate that. Welcome to your family as
    well.
        Ms. Kraninger, I am going to start with you, and these are
    similar to some of the questions that we had together when you
    were willing to meet with me. But let me just start with this:
    I have heard you say time and again today in response to all of
    my colleagues' questioning that your intent is to ensure the
    Bureau is transparent and accountable. But my concern is based
    on the questioning and the answers that you have given today.
    We cannot even get you to be transparent and accountable about
    the work you are doing at the OMB, the current job that you
    have. That is funded by taxpayer dollars; that should be
    transparent to the public. So I have concerns that if you
    cannot even tell us what you are doing on a day-to-day basis,
    how can we trust that you are going to carry that over to the
    CFPB?
        But let me follow up with this: Mick Mulvaney said that
    State regulators and Attorneys General should play an active
    role in enforcing consumer protection laws in the banking
    industry. However, as a former Attorney General myself, I know
    that AGs cannot be the only cop on the beat. The CFPB has been
    vital in uncovering widespread and massive fraud and holding
    those companies accountable, and they are the first stop in the
    States to protect consumers.
        That is your role as well, my understanding from the
    statutes that I read and what you have said today in your
    statement. And let me give you an example of where the CFPB was
    instrumental for us, the States. Wells Fargo, as you well know,
    their actions affected 3.5 million people nationwide, including
    121,000 in Nevada alone. After an investigation by the CFPB,
    Wells Fargo paid a $500 million penalty.
        Can you enumerate the powers that the CFPB has that State
    AGs or State regulators do not?
        Ms. Kraninger. Senator, certainly as we discussed in your
    office, I appreciate your perspective and experience in this
    area. The partnership with the State regulators is essential, I
    believe, to the point that you noted, the States have been
    engaged in the enforcement----
        Senator Cortez Masto. Why do you think it is essential?
        Ms. Kraninger. I am sorry?
        Senator Cortez Masto. Why do you believe it is essential?
        Ms. Kraninger. Certainly because the law actually
    stipulates that, and I think that is important, though. They
    existed prior to the Bureau and were engaged in this activity
    prior to the Bureau's existence. And the statute specifically
    calls out that important coordination role, whether it is with
    enforcement actions or----
        Senator Cortez Masto. Well, let me just say as somebody
    that relied on the CFPB, because I will tell you, in the State
    of Nevada, the regulators were not there when the crisis
    occurred. Nobody stopped it. Nobody was working to prevent it.
    But when the CFPB was created, they were the watchdog
    nationally to work with the States and the States' AGs, and I
    will tell you the CFPB has a national view of the issues, and
    it is not limited by State preemption laws. It is key to what
    happens across this country when we are looking to consumer
    financial protection to work with the States.
        Let me ask you this: Without a strong Federal regulator,
    how do you anticipate States will be able to uncover and put
    together patterns of wrongdoing, potential wrongdoing across
    the country?
        Ms. Kraninger. Senator, I am committed to carrying out the
    responsibilities of the Bureau under the law, which does
    include working with the States to look for those kinds of
    things, to work with them closely on enforcement matters and
    give them that national perspective. We talked about the
    information sharing that is vital between the Bureau and the
    State Attorneys General and the regulators, and certainly I am
    committed to sharing that appropriate information with them to
    support their efforts and looking at the right opportunity for
    the Bureau to step in from a national standpoint.
        Senator Cortez Masto. So outside of serving as a partner
    for State regulators and AGs--rules issued by the CFPB can also
    be enforced by State AGs--do you support empowering the AGs by
    issuing rules through the CFPB?
        Ms. Kraninger. I believe it is an essential responsibility
    of the Bureau to engage in the rulemaking activities, setting
    clear rules. The example of debt collection----
        Senator Cortez Masto. So that is a yes?
        Ms. Kraninger. Yes, Senator.
        Senator Cortez Masto. Thank you. A matter deeply important
    to me is that every American has the right to a day in court
    and that the justice system works for everyone, no matter their
    race, their class, their creed, where you come from, or who you
    know.
        Let me ask you this: Have you ever signed a contract with a
    financial firm that included a mandatory arbitration clause?
        Ms. Kraninger. Senator, I believe that I probably have
    through credit card companies----
        Senator Cortez Masto. Ms. Kraninger, you are a lawyer. Did
    you read the mandatory arbitration clause before you signed it?
        Ms. Kraninger. As a lawyer, I do try to read those things,
    and I have actually read them in the past.
        Senator Cortez Masto. Were you aware that you were forgoing
    your right to sue when you signed the contract?
        Ms. Kraninger. Senator, I certainly was aware of what the
    clauses were that were in the contract. I cannot assure you
    that that is what was there, but I----
        Senator Cortez Masto. Do you believe that ordinary
    Americans page through and read the fine print of these
    contracts and know that they are signing away their rights?
        Ms. Kraninger. I am guessing that many of them do not, and
    I think that is why the model disclosures responsibility of the
    Bureau in statute is important and understanding that the
    Bureau has a role in looking at those things.
        Senator Cortez Masto. Do you support the CFPB's mandatory
    arbitration rule?
        Ms. Kraninger. Senator, Congress certainly acted through
    the Congressional Review Act to preclude that rule from going
    forward. So from that standpoint, it is addressed in that
    manner. I think----
        Senator Cortez Masto. Do you believe all consumers have a
    right to their day in court?
        Ms. Kraninger. Senator, I believe through contract
    relationships and in general there are opportunities for
    consumers to take action, including coming to the Bureau and
    submitting their complaints.
        Senator Cortez Masto. Have you ever investigated a bank or
    payday lender or credit card company?
        Ms. Kraninger. Senator, I have supported investigations in
    many of my roles. I believe actually in terms of financial
    crimes that the Secret Service oversees and Homeland Security
    Investigations oversees--there has been some involvement with
    those institutions.
        Senator Cortez Masto. But personally you have never been
    involved in a prosecution or investigation?
        Ms. Kraninger. Not of financial institutions directly, no,
    ma'am.
        Senator Cortez Masto. Have you ever brought a legal action
    and as counsel formulated a case against a bank, payday lender,
    or credit card company?
        Chairman Crapo. And, Ms. Kraninger, please be brief.
        Ms. Kraninger. No, Senator, I have not.
        Senator Cortez Masto. Thank you. I see my time is up. Thank
    you both for being here. I will tell you, Ms. Kraninger, I do
    as well have concerns about someone without the experience to
    lead a Consumer Financial Protection Bureau, 1,600 employees, a
    billion dollars--or, excuse me, millions of dollars in budget
    that is looking out for the best interests of consumers when it
    comes to financial products. I have concerns about what I have
    heard from you today as being the right person with the right
    experience to lead.
        Let me also say, Ms. Reed, I look forward to supporting
    your nomination. Thank you.
        Chairman Crapo. Senator Reed.
        Senator Reed. Well, thank you very much, Mr. Chairman.
    Thank you both for your willingness to serve.
        Ms. Kraninger, I assume you are familiar with the Military
    Lending Act, so if a servicemember would prefer to go to court
    to enforce his or her rights, instead of being forced into
    arbitration, do you think that servicemember's choice should be
    protected?
        Ms. Kraninger. Yes, Senator, to the extent, again, it is
    provided under the law.
        Senator Reed. The Military Lending Act has been recently
    strengthened by the Department of Defense with new regulations
    to close loopholes and to prevent unscrupulous lenders from
    preying upon servicemembers, men and women. And having in my
    earlier days been an executive officer in a company, I have
    seen this firsthand.
        So do you support the stronger MLA rules? And if confirmed,
    will you enforce them to the fullest extent possible?
        Ms. Kraninger. Senator, I am absolutely committed to
    enforcing the law.
        Senator Reed. The rulemaking pointed out that one of the
    impacts on servicemembers in their military careers is the
    financial instability caused by being exploited, and that
    affects their performance. So the Military Lending Act, I am
    very concerned about and involved in. It just helps our
    readiness.
        One of the things that I think that we had to accept was
    the limit on interest charged to an individual servicemember is
    36 percent. Do you think that is too high given the current
    market rates, which even for credit products are about 16
    percent?
        Ms. Kraninger. Senator, certainly the rate varies
    associated with what the product is and what the risks are
    available. I support competition in the marketplace such that
    servicemembers and others have the opportunity to avail
    themselves of different options in the market based on what
    their financial needs are.
        Senator Reed. The question, I think, is that we statutorily
    set the rate, the top rate at 36 percent. But given current
    rates in the market, which are roughly 16 percent for the
    return on the Dow Jones, my view is I think we should be able
    to lower those rates. So would you be supportive of legislation
    that would lower those rates?
        Ms. Kraninger. Senator, I appreciate where you are coming
    from and the question, but I do think it depends on what the
    product is and what the conditions and terms are. There are
    various products in the marketplace. Certainly when it comes to
    short dollar lending options that are, it differs greatly from
    the credit card products or other products in the market.
        Senator Reed. Well, I would hope that we could work, my
    colleagues and I, to lower that interest rate to make it more
    competitive to what is available in the market for most
    products, regardless of how long the duration.
        Did you or anyone with whom you work at OMB on Homeland
    Security or Justice Department issues ever refer to the
    Administration's policy of separating immigrant families at the
    border as a ``deterrent''?
        Ms. Kraninger. Senator, I am not sure that--that may have
    been in public comments by individuals, but I am not sure.
        Senator Reed. Have you ever used that? Have you ever heard
    anyone discussing it when they discussed the issue?
        Ms. Kraninger. Senator, recognizing that in 2014 that was
    something that was discussed and the courts actually ruled on
    that, that was determined at least in, I believe, the Southern
    District of California as not appropriate. So I appreciate
    where you are coming from on----
        Senator Reed. Do you feel it is not appropriate right now
    and right here?
        Ms. Kraninger. Senator, these are very difficult,
    challenging issues. A sovereign Nation should defend its
    borders, I believe, and at the same time there are a lot of
    circumstances from people around the world with which----
        Senator Reed. Let me ask a simple question. Do you think
    separating children from their parents is a way to deter border
    crossings?
        Ms. Kraninger. Senator, again, I do not want to talk about
    the----
        Senator Reed. You do not want to talk about it, but I am
    asking you a question.
        Ms. Kraninger. Yes, I understand----
        Senator Reed. So would you like to be responsive?
        Ms. Kraninger. I am sorry. I do not want to characterize
    the internal conversations that----
        Senator Reed. I am asking what you feel, ma'am.
        Ms. Kraninger. I understand, Senator, but it does go down
    the road of advice and personal opinion----
        Senator Reed. It goes down the road to your values and your
    judgment and those things that we look for when we evaluate
    someone who is going to lead the CFPB. That is where it goes
    down the road to. And you do not want to go down that road, so
    I would suspect that you probably have done that or you feel
    that way. Do you feel that way?
        Ms. Kraninger. Senator, I do not believe my personal
    opinions or feelings on this issue are the appropriate line of
    discussion. I understand why you are asking. I do believe that
    there are--certainly I have been to many places in the world. I
    have spent time in Guatemala. I served in the Peace Corps. I
    understand the country that we have today is an amazing country
    where we have many freedoms that others in the world do not.
    And I certainly appreciate that this is a place where people
    would like to come to enjoy those freedoms.
        Senator Reed. So I only can assume that you, in fact, used
    the term ``deterrent'' and did not object to it and feel that
    is the appropriate policy consideration. Thank you very much.
        Chairman Crapo. Senator Heitkamp.
        Senator Heitkamp. Thank you. First, thanks to my colleagues
    who are letting me go ahead of them. I am greatly appreciative,
    and I do not know what it is going to cost me at the end of the
    day, but I am pretty sure it is a big favor coming their way.
        Ms. Reed, I want to again encourage the Chairman to move
    this nomination. He knows how diligent we have been working to
    get the Eximbank up and running. I want to say where I
    appreciate Senator Toomey's concerns, I do not want to
    associate myself with the characterizations that he made about
    the Eximbank. I think it has been a tragedy, and I am glad you
    are moving forward, and I want to encourage the Chairman to
    move enough of these nominees now forward with Majority Leader
    McConnell to get the Eximbank up and running. And so,
    obviously, great credentials. We liked you the last time you
    were here. I think you are perfect for this job. Good luck, and
    we want to do everything we can to get you across the finish
    line.
        Ms. Kraninger, I just have a series of yes-or-no questions,
    and it is not about morality or anything else. It is about your
    experience. And I do not want equivocation, just yes or no, if
    we can do that.
        Have you ever worked at a bank or a credit union?
        Ms. Kraninger. Senator, I have not and like----
        Senator Heitkamp. OK.
        Ms. Kraninger. ----many other----
        Senator Heitkamp. Have you ever had oversight or regulated
    a bank or a credit union?
        Ms. Kraninger. No, Senator, I have not, like many----
        Senator Heitkamp. OK. Have you ever been responsible for
    oversight or leadership in supervising payday lenders?
        Ms. Kraninger. No, Senator, I have not, like many other----
        Senator Heitkamp. Have you had experience working with
    credit bureaus, insurance companies, debt collectors, and
    student loan processors?
        Ms. Kraninger. Senator, in a professional capacity, like
    many other nominees, I have not had direct experience with
    that.
        Senator Heitkamp. OK. Have you had any final decision-
    making responsibility for enforcing State or Federal consumer
    protection laws?
        Ms. Kraninger. Senator, again, like many other nominees
    approaching different positions, I have not had direct----
        Senator Heitkamp. So the answer is no.
        Ms. Kraninger. ----experience in that.
        Senator Heitkamp. Have you had any experience under the
    Equal Credit Opportunity Act, any final responsibilities for
    leadership there?
        Ms. Kraninger. Senator, I have not, but I have certainly
    made myself familiar----
        Senator Heitkamp. Truth in lending----
        Ms. Kraninger. ----with these--with these acts and the
    responsibilities of the Bureau----
        Senator Heitkamp. Have you ever worked or volunteered your
    time on matters related to consumer protection?
        Ms. Kraninger. No, Senator, I do not believe that I have. I
    have certainly volunteered my time----
        Senator Heitkamp. Have you ever worked on financial
    literacy or volunteered your time to promote financial
    literacy, especially for youth?
        Ms. Kraninger. Yes, Senator, I actually have done that.
        Senator Heitkamp. OK.
        Ms. Kraninger. I have some experience in working with
    individuals on that, particularly when I was in college, we did
    have a program to promote financial literacy and----
        Senator Heitkamp. And what did you do to--what was your
    involvement in that program?
        Ms. Kraninger. Working a little bit on curriculum in the
    area.
        Senator Heitkamp. Good.
        Ms. Kraninger. So it is something that is definitely
    important to the roles and responsibilities I would be taking
    on as Director.
        Senator Heitkamp. Do you have a Ph.D. or Master's degree in
    economics or finance?
        Ms. Kraninger. Like many other nominees in these positions,
    no, I do not.
        Senator Heitkamp. While you were in law school, what
    classes did you take regarding consumer protection?
        Ms. Kraninger. Senator, it was a long time ago, so I do not
    remember every class I took, but I certainly did take the
    Administrative Procedures----
        Senator Heitkamp. But you remember what you did in college
    relative to financial literacy, so----
        Ms. Kraninger. Well, the Administrative Procedures Act was
    certainly something that I studied extensively. I took a class
    in privacy law. I did take a class in other--cybersecurity law
    actually, as a matter of fact. Those are all relevant to the
    discussions that we are having here today, as well as
    corporations, which I know was required of every individual in
    the program that I took.
        Senator Heitkamp. OK. Thank you.
        I think the point that I am trying to make is this is a
    highly technical job, and, you know, simply having the skill
    sets of a law degree and having some familiarity with the
    operation of the Administrative Agencies Practice Act I think
    gets us to a point where we have to judge--I mean, I am not
    asking you about morality. I am not asking you about anything.
    I am just asking you about your core competencies here for the
    job that you have been nominated for.
        And so I think, obviously, you are highly competent and a
    trained professional. I just think that maybe we ought to have
    somebody who understands kind of the--who has had experience,
    as Senator Cortez Masto talked about, with the crisis, has had
    experience in dealing with people who have--and has empathy.
    And I think, you know, to Senator Reed's point, you know, it
    may seem irrelevant, but this is a job where literally people
    are on the edge, where they do not know if they are going to
    make payroll, they do not know if they are going to be able to
    put food on the table. And we want somebody in that job who not
    only has core competency but some empathy.
        So I thank you so much, and my time is up, and, again,
    thank you to my colleagues.
        Chairman Crapo. Thank you.
        Senator Van Hollen.
        Senator Van Hollen. Thank you, Mr. Chairman. I thank both
    of you for your testimony here today.
        Just to follow up, Ms. Kraninger, on some of these
    questions, because I understood some of the concerns you
    expressed about not getting too deeply into the internal
    deliberations and advice you offered. I understood that part.
    But now you are going to be heading up an independent agency,
    right? This is an independent agency, is it not?
        Ms. Kraninger. Yes, Senator, it is.
        Senator Van Hollen. And it is not that you are going to be
    in a line position simply enforcing the policy from above. You
    are going to play a key role in developing policy as the head
    of an independent agency. And so I do believe your personal
    views on a range of issues are important in that context. And I
    was not here for all the questioning of Senator Warren. I heard
    Senator Reed's question. And is it your position that you are
    not going to answer the question about whether or not you
    personally supported the policy of family separation,
    separating kids from their parents? What is your personal view
    on that policy?
        Ms. Kraninger. Senator, I appreciate greatly the questions
    that you are raising and am happy to discuss qualifications and
    my judgment. I have certainly always given my best advice to
    every person that I have worked for in my career, and that is
    very important to me, as well as keeping that advice and
    perspective close.
        Senator Van Hollen. I think the difference here, as I said,
    it is one thing to not share openly advice that you are giving
    within the Administration. But given the fact that you are now
    going to head an independent agency where your views and
    positions will definitely inform a lot of the actions that you
    will take, I do think it is troubling that you will not share
    that information with the Committee.
        Let me ask you about the Office of Fair Lending and Equal
    Opportunity, because in our State of Maryland, like so many
    other places in the country, we have had a bad history of
    discrimination in lending in many places. There was a case
    against Wells Fargo in Baltimore a little more than 10 years
    ago. There have been other cases where it was established that
    they discriminated against African Americans and people of
    color.
        Do you agree this is a continuing problem that we have to
    face in this country, fighting discrimination in lending?
        Ms. Kraninger. Yes, Senator, I do. I think it is incredibly
    unfortunate. Discrimination should have no place in society,
    much less the markets. But it certainly exists.
        Senator Van Hollen. And one of the things that was
    established when the CFPB was established was the Office of
    Fair Lending and Equal Opportunity, as I mentioned, and one of
    the first things that Acting Director Mulvaney did was he moved
    the enforcement authorities for fair housing out of that
    office. Would you be willing to put those enforcement
    authorities back into the Office of Fair Lending and Equal
    Opportunity?
        Ms. Kraninger. Senator, I can assure you that enforcing the
    fair lending laws is a critical responsibility. Whether it
    happens in the Division of Supervision or whether it happens in
    a reconstituted Fair Lending Office, it is definitely something
    that I can commit to you that I will look at and review freshly
    and talking to the staff that are there and understanding how
    their responsibilities have changed in this change. Looking
    fresh at the organization is something I will do.
        Senator Van Hollen. You know, I think it was rightfully
    interpreted at the time as weakening the authority, because the
    idea was the folks who were paying close attention every day
    and doing the supervising are probably in the best position to
    do the enforcement. And having the enforcement authority
    obviously helps them in terms of getting the attention of the
    folks that they are overseeing.
        The same with the Office of Student Lending. As you know,
    Acting Director Mulvaney abolished the Office of Student
    Lending. That is not to mean there are not efforts going on in
    student lending, but would you be willing to reestablish that
    given the fact that we have students who have trillions of debt
    and in many cases there are also issues with respect to their
    contract, their loan contracts? As you know, there are a number
    of lawsuits going on. So would you be willing to reestablish
    that office given the centrality of that issue?
        Ms. Kraninger. Senator, I agree with you that student
    lending is an important issue. It is certainly something
    Congress is looking at, and there have been a lot of changes in
    that under the law in recent years. At the same time, I want to
    note that I will absolutely review the structure of the
    organization, and I will certainly consider that with an open
    mind.
        Senator Van Hollen. The last thing I will ask regarding the
    child separation policy, you know there has been a court
    decision ordering the Administration to reunite these children
    with their parents within a certain period of time. The
    Administration has missed those deadlines. There is a resource
    issue. And in your capacity at OMB, I hope you will work with--
    as you go through this process here, I hope you will work with
    us to get a supplemental appropriation, because I am hearing
    there was an article in Politico the other day saying that the
    Administration was planning on taking resources from other
    parts of the Department of Education to pay the costs of
    complying with the court order, and I think that we would be
    better served if we find those resources to meet this court
    order without robbing another part of the Department of
    Education.
        Are you familiar with that issue, and can you work with us
    on that as your nomination continues to work its way through
    the process?
        Ms. Kraninger. Senator, I am not. It must be within the
    Department of Health and Human Services, which is not my area--
    --
        Senator Van Hollen. Did I say Department of Education?
        Ms. Kraninger. Yes, Senator. That is OK.
        Senator Van Hollen. I am sorry. I apologize. You are right,
    Health and Human Services.
        Ms. Kraninger. It must be within the Health and Human
    Services, which is not in my purview. But I am happy to take
    your concerns back.
        Senator Van Hollen. Thank you.
        Chairman Crapo. Thank you.
        Senator Jones.
        Senator Jones. Thank you, Mr. Chairman. Thank you for this
    hearing. And to our nominees, I apologize for being in and out.
    Schedules get kind of crazy sometimes, so I do apologize.
        Ms. Kraninger, I want to follow up a little bit on a couple
    of things. I know that Director Mulvaney and I think you have
    talked about getting back to the statutory mission of the
    agency, which I appreciate. But one of the missions, one of the
    objectives is that consumers are to be protected from unfair,
    deceptive, or abusive acts and practices and from
    discrimination. For millions and millions of Americans, that
    last clause may be the most important, particularly people of
    color.
        Folks these days, someone can look just like I do, which
    would be really said, to be honest with you, but they can look
    like I do, have the same credit, have the same income, have the
    same profession, and yet another person who has a different
    skin color would get offered a different financial product.
        And so I want to ask, first, do you plan on making fair
    lending a priority if you are confirmed?
        Ms. Kraninger. Senator, I think it is abhorrent that
    discrimination exists in society and in the markets, and I am
    committed to enforcing the law, absolutely, to address any of
    the issues that we find in that area.
        Senator Jones. Great. Well, thank you for that.
        Now, discrimination today takes a lot of different forms.
    It is not like some of the old days where you see the white and
    colored signs on water fountains or restrooms. It can be a lot
    more subtle, and sometimes it does not even have the actual
    intent but can have the disparate impact on a group.
        So I would like to get your thought on how you will view
    cases and whether or not you will use disparate impact in
    looking at the broader section of a minority group and whether
    that would come into play and what your feelings are about
    disparate impact uses, because that is used a lot in a lot of
    legal cases that I have been involved in over time, because you
    cannot always prove the specific intent. How do you feel about
    disparate impact on the use of--in your CFPB cases?
        Ms. Kraninger. Senator, I appreciate the question, and I
    appreciate the point that you are raising, because, yes, in
    many cases this could be a more subtle action. I think there
    are a few things that the Bureau can do in this area. Certainly
    in terms of working through the supervision process, to your
    point, if there is no intent, this is something that can be
    looked at.
        At the same time, with respect to court cases and
    enforcement actions, as you are well aware, the arguments about
    disparate impact are very complicated, and it is a challenging
    area, legally speaking. So I can commit to you that, should I
    be confirmed in this position, when I get to the Bureau, I will
    have a detailed conversation with the staff on this area to
    understand what positions the Bureau has taken in the past on
    this issue, and what the status of litigation is on the issue,
    and take the appropriate actions to ensure that we are
    promoting fair lending.
        Senator Jones. Well, I think they have used it in the past
    and used it somewhat successfully, but Director Mulvaney has
    said he wants to get away from it. Would you be willing to take
    another look at using disparate impact on an entire community,
    whether or not there is a sign that says, ``We are not going to
    give this person a loan because they are black or Asian''? But
    if it is affecting a broad swath of minority consumers, would
    you be willing to take a look at using the disparate impact
    theory to try to help resolve some issues of discrimination?
        Ms. Kraninger. Senator, I will commit to you in
    establishing clear rules and making sure that they are enforced
    that I will look at this issue, absolutely.
        Senator Jones. I am not sure if that is a yes or a no. I am
    going to take it as a yes. But I would like to go back to a
    little bit--I was here for Senator Tester's comments, and I was
    a little bit--and we talked about this the other day. I
    appreciate your coming in and talking to me about the payday
    lending rules that have been worked back.
        I guess what concerns me a little bit in our meeting and
    then with Senator Tester, you had talked about a respect for
    the process and the rulemaking process. But the payday lending
    rule went through a 5-year process. It went through a lot of
    comments, I mean thousands if not tens of thousands or a
    million. I do not know exactly how many, but it was a ton for a
    5-year process. It got finalized, and then Director Mulvaney on
    his own decided to walk that back and start that process all
    over again.
        And so I am a little bit concerned that we are now
    respecting a process that has not been respected before. And I
    would like for you to comment on that and what you plan on
    doing with consumers, because it is a huge issue in my State. I
    mean, 250,000 people took out 2 million loans. That is an
    average of eight of these loans per person. And it is a huge
    process. It is really hurting these people a lot.
        So I would like to get a little bit better clarity when you
    are talking about respecting a process that is already going
    on. What do you mean with the consumer lending right now?
        Ms. Kraninger. And, Senator, I truly appreciated your time,
    and I recognize it is a difficult issue in many States. They
    have taken different actions for a myriad of reasons, whether
    it is authority or, you know, willingness, frankly, on payday
    lending.
        What I mean in terms of the process is that the Acting
    Director has announced the reconsideration of that rule, and
    from that standpoint the basis for that reconsideration and
    what aspects are being reconsidered is not something that I am
    privy to, nor has it been discussed publicly. And so that is
    the process that is ongoing within the Bureau right now under
    active consideration.
        Senator Jones. All right. That is all the time I have.
    Thank you, Mr. Chairman.
        Chairman Crapo. Senator Donnelly.
        Senator Donnelly. Thank you, Mr. Chairman. I want to thank
    the witnesses and your families.
        I am a strong supporter of the Export-Import Bank, our
    country's export credit agency. It helps American businesses
    export goods and services and compete in our global
    marketplace. The Eximbank does not cost taxpayers dime. In
    fact, it has returned billions to the Treasury. It protects and
    creates countless jobs across the country.
        In Indiana, since 2012 the Eximbank has directly helped 84
    Hoosier companies, including 63 small businesses, to export
    more than $2 billion in goods and services overseas. In 2015 I
    worked with Senator Heitkamp and a bipartisan group of
    colleagues to end a 6-month shutdown of the Bank and enact a
    long-term reauthorization.
        Unfortunately, Eximbank is still not running at full steam
    because it lacks the three-fifths board membership required to
    obtain a quorum and approve transactions over $10 million. As a
    result, there is a backlog of $42 billion in deals representing
    250,000 jobs stuck in a pipeline awaiting approval. We need a
    fully operating Export-Import Bank now more than ever.
        While the U.S. has handcuffed its own export credit agency
    in recent years, our international competitors have
    significantly increased their efforts. There are at least 85
    foreign export credit agencies aggressively supporting their
    own domestic industries. Countries like China, Brazil, and
    India are doubling down on their export credit agencies. Not
    only that, but current trade policies are damaging the foreign
    markets our Hoosier farmers and manufacturers have spent
    decades developing.
        Our exporters were already at a disadvantage from a
    weakened Eximbank, and now trade policy is making it worse. To
    grow and maintain a strong economy, we need to send American
    goods, Indiana goods, all over the world. Our businesses
    deserve a level playing field with their foreign competitors.
    Policymakers should make it easier, not harder, for businesses
    to do that.
        Ms. Reed, these are fairly simple questions. You do not
    have to go into a long explanation on them. Do you agree
    foreign countries are aggressively investing in their own
    export credit agencies in order to boost their domestic
    industries?
        Ms. Reed. Yes.
        Senator Donnelly. Do you agree the U.S. is hurting itself
    by not having a fully functioning Eximbank when its competitors
    are increasing resources for their export credit agencies?
        Ms. Reed. Yes, I do.
        Senator Donnelly. Do you agree Eximbank helps Hoosier
    businesses like manufacturers and farmers develop foreign
    markets for U.S. goods and services?
        Senator Reed. Absolutely.
        Senator Donnelly. Just months ago, this Committee approved
    Ms. Reed's nomination for Eximbank Vice President with an
    overwhelming 22-3 vote. Now she has been nominated as President
    of Eximbank. I encourage that confirmation as soon as possible
    to bring fresh leadership. Hopefully her confirmation will be
    followed by fellow board nominees, and we can allow the
    Eximbank to return to full strength for the first time in
    several years, creating more American jobs again. A strong
    Eximbank bank boosts exports, creates jobs, and returns money
    to our taxpayers.
        Ms. Kraninger, 2 months ago, under Director Mulvaney's
    leadership, the CFPB announced it would eliminate its student
    loan office and merge it into another office. Ms. Kraninger, I
    do not know of an area where young people in my State have
    incurred more debt than in the area of student loans. For many
    of them, it has prevented them from being able to buy homes,
    being able to buy cars, being able to fully participate in our
    country and our economy.
        A recent report found 60 percent of Indiana's college
    graduates leave with student loan debt, and the average is
    $29,000 per student. I saw your answer to Mr. Van Hollen before
    about reinstating the student loan office. I am a strong
    supporter of that. You are going to review that. I would urge
    you very, very much to do that.
        What are your plans for protecting student borrowers?
        Ms. Kraninger. Senator, this is an important issue, and
    certainly under the law the Bureau was provided the
    responsibility for looking at private student loans.
        Senator Donnelly. Well, now that they have closed down the
    office, what are your plans? You said you would take a look at
    reopening it. What specific plans do you have right now in
    regards to student loans?
        Ms. Kraninger. So, Senator, there is the position of the
    private student loan ombudsman that was created in the statute,
    the position that still exists. So certainly a first-order
    issue is going to be sit down with the individuals in that
    office to understand the activities that they have ongoing.
        I appreciate the priority you are placing in this, and it
    is certainly something I want to understand better. At the same
    time, with the Federal role in student lending, both in
    origination--with 92 percent of the originations today
    happening at the Department of Education and with their efforts
    to actually bring servicing into the Department of Education, I
    think that is another area that I can tell you is a priority.
    It is sitting down with the officials at the Department of
    Education to talk through what their efforts are there, where
    the Bureau can be helpful, and what role the Bureau can play
    in----
        Senator Donnelly. Well, for many of our young people, not
    only in my State, they are looking to you for help because
    interest rates are--if you look at the interest rate on a house
    and on a student loan--and, obviously, they are different
    products. But you have young people paying incredibly high
    interest rates who look and feel they may never get out from
    under this burden that they have and they will never be able to
    buy a home and they will never be able to buy a car. And that
    is an extraordinarily discouraging situation for people across
    our country.
        One other question I want to ask. Mr. Mulvaney once called
    the CFPB a ``joke'' in a sad, sick kind of way. Do you share
    his sentiment?
        Ms. Kraninger. Senator, Director Mulvaney has certainly
    responded to those comments. I can tell you that I support----
        Senator Donnelly. I am asking you--yeah.
        Ms. Kraninger. I support the Bureau as it was established
    in Congress and the roles and responsibilities it was given.
        Senator Donnelly. But what I asked you is did you think it
    was a sad, sick joke, the way it was being run?
        Chairman Crapo. I thought that was a good answer.
        Ms. Kraninger. Senator, again, I support the Bureau's
    mission and look forward to, if confirmed, vigorously----
        Senator Donnelly. Well, this is simply a yes or no. It is
    like, ``Do you like peanut butter or not?'' Do you think it was
    a sad, sick joke the way it was being run or not?
        Ms. Kraninger. Senator, those are not words I would use,
    and I believe the Director has responded to those comments
    since.
        Senator Donnelly. Thank you very much.
        Thanks, Mr. Chairman.
        Chairman Crapo. Thank you, Senator Donnelly.
        We have had a request by several Members of the Committee
    for a second round. I will agree to that, although we will hold
    it to 5 minutes. The Senators have been taking quite a bit of
    liberty today, and we are well past the time that we should
    have allocated--or that we have----
        Senator Donnelly. I did not take much liberty, Mr.
    Chairman.
        Chairman Crapo. I will accept your comment, Senator
    Donnelly. So we will do that, and, Senator Brown, I would turn
    to you.
        Senator Brown. Thanks, Mr. Chairman.
        Ms. Kraninger, you talked a lot about accountability and
    transparency at the CFPB. When you submitted paperwork to this
    Committee, you had to disclose any campaign contributions from
    the last 8 year above $500, correct?
        Ms. Kraninger. Yes, Senator, I believe that is--I do not
    have the form in front of me, but I believe that was the
    request.
        Senator Brown. Well, you did not make a $500 donation to
    Governor Kasich's Presidential campaign, but you made two
    separate $250 donations. You did not disclose that, correct?
        Ms. Kraninger. I believe--again, I did disclose exactly
    what was requested by the Committee, Senator. I do not remember
    the exact facts. I do not have the paper in front of me. If you
    do--to note that it was above $500, and I----
        Senator Brown. I do not believe what you just said was
    true. Well, let me ask again. Did you disclose--you did not
    disclose the contributions to Mitt Romney's campaign that were
    under the $500 threshold but were more than $600 total. So two
    contributions, you did not think that qualified for what you
    should disclose?
        Ms. Kraninger. Senator, I believe there was a time period.
    Again, I do not have the documents in front of me. If you have
    them, I would be happy----
        Senator Brown. We do, and you made contributions to Kasich.
    You made contributions to Jeb Bush. Do you know of--that should
    have been disclosed under law--or under the rules of this
    Committee. Did you make any other donations to the 2016
    Presidential campaign?
        Ms. Kraninger. Senator, I believe those are the only two
    that I did make, yes.
        Senator Brown. OK. You did not answer in that first round
    my question on whether you would appeal the 9/11 scammer case.
    You said you would implement the law. Who decides whether to
    appeal or not?
        Ms. Kraninger. Senator, I am not familiar with the details
    of where that case is. I certainly appreciate the
    responsibility----
        Senator Brown. But who decides whether to appeal a case or
    not at the CFPB?
        Ms. Kraninger. The Director does have the authority to
    determine these things. At the same time, if a case is actually
    headed to the Supreme Court, the Bureau does not have
    independent representation authority to take everything to----
        Senator Brown. So do you plan to defend the agency in this
    case, on the scammer 9/11 case?
        Ms. Kraninger. Senator, without the benefit of being inside
    the Bureau to understand the positions and litigation strategy
    that was taken, that is a very challenging question to answer,
    and I do not want to prejudge that either. The opportunity to
    speak with the General Counsel to understand the positions that
    they have taken, to understand the conversations that they may
    have had with the Department of Justice, given the fact that
    the Bureau cannot represent itself before the Supreme Court is
    something that I would certainly undertake should I be
    confirmed.
        Senator Brown. Not long ago--I think it was in May--
    Director Mulvaney teamed up with a group of payday lenders to
    sue the CFPB, the agency he claimed to be leading and to delay
    its payday rule. You are a lawyer. Do you think agencies should
    sue themselves to prevent consumer protections from being
    implemented?
        Ms. Kraninger. Senator, I think that the responsibility is
    clear in the statute for the Director to carry out the law and
    manage the Bureau appropriately, and that is certainly what I
    would pledge to do. And I would certainly pledge to work with
    all of you in carrying out those responsibilities.
        Senator Brown. Do you think it is proper for an agency to
    sue--for an agency chief to sue itself, to sue himself,
    herself, itself?
        Ms. Kraninger. Senator, I am not familiar with the details
    or the internal deliberation that may have led----
        Senator Brown. No, I think you must know about--it is not a
    question of internal deliberations. Do you think it is proper
    for the head of an agency to sue that--to team up with outside
    interests, whether you generally are pro-payday lenders, as
    Mulvaney from his travels and his exhortations and his
    political contributions certainly would--but whether or not you
    are close to or supportive of an interest group, do you think
    it is proper for an agency to join outside interest groups--an
    agency chief to sue that agency?
        Ms. Kraninger. Senator, being unfamiliar with the specific
    facts that you are articulating here, I do not know the basis
    for the decision. But I----
        Senator Brown. I am sorry----
        Ms. Kraninger. ----will tell you, Senator, that it is--it
    would certainly be unusual. It would certainly be----
        Senator Brown. That was not my--I appreciate your agility
    and facileness. That was not my question commenting on that
    case. I am saying: Do you think it is proper for an agency
    chief to join--you are a lawyer, I am not, so maybe you are at
    an advantage here. But is it proper for an agency chief to join
    an outside interest group to sue the agency itself?
        Ms. Kraninger. It is certainly unusual. I----
        Senator Brown. Thank you. I know it is--we have established
    that it is unusual. We know that. You do not know the
    specifics; at least you say you do not know the specifics of
    the case. That is fine, too. Is it proper for an agency chief
    to sue its own agency with or on behalf of an interest group
    that has business in front of that agency?
        Ms. Kraninger. Senator, I can tell you that I come to this
    position without any particular special interest other than
    serving the American people, and I----
        Senator Brown. Can't you just say, ``No, it is not
    proper''?
        Ms. Kraninger. I do not know the details----
        Senator Brown. Or, ``Yes, it is proper''?
        Ms. Kraninger. ----Senator. I do not----
        Senator Brown. Or, ``No, I will never go it,'' or, ``Yes,
    maybe I will do it''?
        Ms. Kraninger. Senator, it is unusual, and I am sure,
    again, there are reasons that that action may have been taken
    that I am not privy to. But, again, I certainly pledge to you
    that I will carry out the duties and responsibilities of this
    position to the best of my ability.
        Chairman Crapo. Senator Warren.
        Senator Warren. Thank you, Mr. Chairman.
        All right. So you do not have any experience in consumer
    finance or consumer protection, no qualifications at all.
    Evidently the one thing that you have done in your career is
    work on President Trump's 2019 fiscal year budget request for
    the CFPB, and the Trump administration has used that, now
    claiming that this gives some insight into how you would run
    the agency. So this is an ``Are you qualified?'' question that,
    at least according to the Trump administration, should be
    directly in your area of supposed expertise.
        Now, let us go through it. To be clear, the CFPB sets its
    own budget, so the budget you proposed had no actual effect on
    the agency. Is that right?
        Ms. Kraninger. That is correct.
        Senator Warren. And on top of that, the budget you set for
    the CFPB is a single top-line number. It does not break down
    how the CFPB would adjust its spending to reach that number. Is
    that right?
        Ms. Kraninger. That is correct.
        Senator Warren. Good. So you are the budget expert. Let us
    talk about how the CFPB would meet the budget that you drafted.
    Your budget for 2019 calls for a 23-percent cut relative to the
    CFPB's proposed 2019 budget. That is about a $147 million cut.
    CFPB's number one expense representing more than half of its
    total cost is compensation and benefits of its employees. Other
    than the Director and the dozen new political appointees that
    Mick Mulvaney has brought to the agency, every other CFPB
    employee is a civil servant.
        So in order to achieve the 23-percent cut you have
    proposed, would you fire civil servants?
        Ms. Kraninger. Senator, first let me clarify that it is the
    President's budget request and not mine. Certainly I did
    support its development.
        Senator Warren. Can we just do this--we are going to be
    held tight on time. Would you fire civil servants? Is that your
    plan?
        Ms. Kraninger. Senator, to your point, in fiscal year 2017,
    53 percent of the funds that were utilized under Director
    Cordray were for salaries and benefits of people, and so----
        Senator Warren. So are you saying--can you just give me a
    yes or no? Will you fire civil servants?
        Ms. Kraninger. Senator, there are laws in place certainly
    that protect civil servants, and----
        Senator Warren. So is the answer no?
        Ms. Kraninger. The answer is that 53 percent with salaries
    and benefits, which does leave a significant amount of funds
    for----
        Senator Warren. So will you fire civil servants--Mr.
    Chairman, I am going to ask for extra time if we are going to
    keep playing this game. It is a straightforward--will you fire
    civil servants? That is not hard. This is your area of
    expertise, your budget that you put forward. Do you contemplate
    firing civil servants to meet your $147 million cut? Yes? No?
        Ms. Kraninger. Again, Senator, it is not my budget. It is
    the President's budget.
        Senator Warren. Then does the President's budget as drawn
    up by you and offered as your expertise for this job
    contemplate firing civil service employees?
        Ms. Kraninger. Senator, the proposal to Congress is what
    the President's budget reflects, and it was a decision on the
    debt and deficit situation. That was certainly the focal point
    for----
        Senator Warren. In other words, we are just playing dodge
    ball here. If you are not going to fire civil servants, then
    let us see how you are going to try to make this up.
        Let me try another one. The next largest set of
    expenditures for outside contracts, a big chunk goes to
    maintaining the agency's cybersecurity. Do you plan on reducing
    cybersecurity?
        Ms. Kraninger. So 31 percent of the funds in fiscal year
    2017 was for outside contractor services. That certainly is a
    big part of----
        Senator Warren. Could we please stop playing dodge ball. Do
    you plan to cut expenditures? The next biggest investment is on
    cybersecurity. Do you plan to cut on cybersecurity?
        Ms. Kraninger. Senator, I do believe that that other
    contract services line is something that really does need to be
    examined.
        Senator Warren. Do you plan to cut on cybersecurity? It is
    the next biggest line.
        Ms. Kraninger. Senator, cybersecurity and IT investment are
    certainly important to the organization's carrying out----
        Senator Warren. So is that a no, you will not cut?
        Ms. Kraninger. I think it is something that needs to be
    examined, absolutely. Every line item does.
        Senator Warren. Does that mean cut or not cut?
        Ms. Kraninger. Senator, without being inside the Bureau and
    going through line by line----
        Senator Warren. So you might cut cybersecurity?
        Ms. Kraninger. There could be opportunity----
        Senator Warren. OK.
        Ms. Kraninger. ----within contracts in any area----
        Senator Warren. So the next largest expense is travel
    costs. As I assume you know, most of the agency's travel cost
    is because the agency sends examiners to visit the financial
    companies that they supervise so they can actually make sure
    that they are complying with the law. That supervision is
    required by Dodd-Frank. Would you cut back on examinations and
    supervision in order to achieve the 23-percent cut you need to
    achieve?
        Ms. Kraninger. Senator, looking at travel I think is a
    legitimate consideration. At the same time----
        Senator Warren. Recognizing that this is travel to go
    enforce the law at the banks, you would cut that back?
        Ms. Kraninger. I think looking at the travel and looking at
    the efficient distribution of staff is certainly something that
    is appropriate----
        Senator Warren. So you are thinking cutting back so we do
    not send as many people out to enforce.
        You know, I just want to be clear on this. Even if you got
    travel cost to zero, you would not be anyplace close to what
    you put forward as the proposed budget. So where is the $147
    million, the 23-percent cut, coming from? Can you just tell me
    where the areas are you plan to cut that is going to get us
    there?
        Chairman Crapo. And please keep your response brief.
        Ms. Kraninger. Senator, this was the President's budget
    request, and I pledge to you that I will look at every line
    item within the Bureau's budget----
        Senator Warren. No, you do not----
        Ms. Kraninger. ----should I be confirmed.
        Senator Warren. ----get to dance away from this by saying
    it is the President's budget. The President has offered you up
    as saying this is your expertise. Your one piece of consumer
    protection expertise is you put together a budget for the CFPB.
    So what I want to know is you proposed a 23-percent cut, $147
    million. Give me some ideas about how you actually would make a
    $147 million cut at that agency?
        Chairman Crapo. Please respond briefly.
        Ms. Kraninger. Senator, I believe there are opportunities
    for efficiency and consideration, and it may involve, frankly,
    spending funds on other activities that are underfunded. So I
    pledge to you that I will look carefully at the budget of the
    Bureau.
        Senator Warren. So let us just be clear----
        Chairman Crapo. Senator----
        Senator Warren. ----I want to be clear on this. She has
    dodged around this for this entire question, line of questions.
    The one thing you have done in your career that is related to
    the CFPB is to come up with a budget number, and the budget
    number simply does not add up. You cannot explain how that
    agency can do its work if it has a 23-percent budget cut that
    you put together and the Trump administration offers as your
    expertise. The only thing you can come up with is, well, maybe
    you will cut travel, which means there will be less
    enforcement. And I know that will make bank lenders happy,
    payday lenders happy, but it does not reflect any knowledge of
    the CFPB or any commitment to the CFPB's central mission of
    trying to protect consumers and level the playing field.
        Chairman Crapo. Senator Tillis.
        Senator Tillis. Ms. Kraninger, a lot of people have tried
    to boil complex subjects down into simple yes-no answers. There
    is only one that I heard that I felt like we deserved a yes-or-
    no answer, and that was from Senator Donnelly. Do you or do you
    not like peanut butter?
        [Laughter.]
        Ms. Kraninger. Senator, I like peanut butter.
        Senator Tillis. Because outside of that question, I think
    it is absurd for anybody up here to say that this was nothing
    more than the sort of ``gotcha'' tactics that some Members use
    to try and, well, support their narrative.
        Now, I want to get on OMB. First off, how big is the CFPB?
    How many employees?
        Ms. Kraninger. There are about 1,600 employees at the CFPB.
        Senator Tillis. Do you think that within that employee base
    that you have a few economists and finance experts and people
    that have worked for credit agencies or worked for business
    lending or, you know, any number of financial fields?
        Ms. Kraninger. Yes, Senator, they have a wide variety of
    skill sets and expertise that is being brought to bear.
        Senator Tillis. So you as the manager, would you actually
    see yourself getting up in the morning, coming in early, and
    writing out the policies or directing the affairs of the agency
    and the priorities?
        Ms. Kraninger. Senator, it is certainly the latter,
    directing the priorities and expecting the staff to put forward
    the policies that align.
        Senator Tillis. Thank you. How big was the scope of your
    portfolio--or how big is the scope of your portfolio at OMB
    with respect to the whole of the Administration?
        Ms. Kraninger. It is roughly a fifth of the total
    Government, $250 billion in resources, 37 agencies.
        Senator Tillis. So you have a lot of time in your day--I
    was in research and development early in my career in the 1980s
    up in Boston, and I was a product manager. So when we were
    formulating a technology policy, I would bring R&D, I would
    bring manufacturing, I would bring finance, I would bring
    marketing together. It was the scientists that worked under my
    matrix supervision who came up with the ideas. And then it was
    these other organizations to figure out the complexities, the
    pipes, all that you needed to do to actually pay for it,
    administer it.
        Would you kind of consider that to be an analog to your
    role in the Office of Budget and management, not formulating
    policy but implementing it?
        Ms. Kraninger. Yes, Senator, that certainly is the case,
    and with a wide variety of staff and variety of topics.
        Senator Tillis. Which is why I find it remarkable that
    anybody would suggest that you were actively engaged in the
    formulation of the policy on child separations. You have
    certain--if you take a look at child separations, it is
    something I know a lot about because I proposed--I love the
    passion here about solving the child separation problem. I
    would like to see that rhetoric go from this Senate Committee
    to the floor where we have a solution. And I will be talking
    about it on the floor a little bit later today, because I
    sometimes wonder whether or not people really want to solve
    this problem, or if they want to use it to come here and
    pretend that only the President can solve the problem. It is
    the Congress that can solve that problem, and once we pass that
    bill, in your current capacity, we would expect you to figure
    out how to implement the policy.
        It is frustrating to me to see the passion expressed about
    certain issues in this Committee and an absolute vacuum in the
    chamber where we can actually produce a result. This, by the
    way, is not leading up to a yes-no question. But can you tell
    me just a little bit more about, again, on a day-to-day basis,
    to what extent in your entire tenure in office at OMB that you
    have ever been actively engaged in crafting the policy choices?
        Ms. Kraninger. Senator, that is a very fair question. In
    terms of what generally comes before the Office of Management
    and Budget, it is what the agencies are formulating. They put
    forward what their leadership would like to pursue, or they
    have received direction from the President about activities
    that they should undertake, and they are formulating the manner
    and how to address what the President's priorities are and what
    he has asked of them. And then we are supporting that effort.
        Senator Tillis. So, again, first off, I want to
    congratulate you on your nominations, and for the family
    members, thank you all for being here. I know that these
    hearings can be somewhat troubling, but you should never forget
    the fact that these two nominees have had very distinguished
    careers and are very deserving of the nominations, and you all
    should be proud of it. Again, I just want to say I hope that
    the focus on child separations that I saw in this room
    translate to people who want to solve the problem. We are down
    to what I consider to be very minor differences. If people look
    at it and within their hearts they truly want to keep families
    together, Congress needs to fix this problem. You did not craft
    the legislation. You were trying to determine how to implement
    the policy. And we should put a mirror on the Members of the
    U.S. Senate and say, ``Why aren't you fixing this problem?''
    Thank you, Mr. Chairman.
        Chairman Crapo. Thank you, Senator Tillis. That does
    conclude the questioning. For Senators wishing to submit
    questions for the record, those questions are due in 1 week, on
    Tuesday, July 24. We ask both nominees to respond to these
    questions by Tuesday, July 31, so that we can vote that week on
    the nominations.
        We thank you both for joining the Committee today. As
    Senator Tillis indicated, sometimes these Committee hearings
    get intense. We appreciate you being willing to come forward
    and put yourselves forward for service to the country.
        With that, this hearing is adjourned.
        [Whereupon, at 12:42 p.m., the hearing was adjourned.]
        [Prepared statements, biographical sketches of nominees,
    responses to written questions, and additional material
    supplied for the record follow:]
                   PREPARED STATEMENT OF CHAIRMAN MIKE CRAPO
        This morning, we will consider the nomination of two individuals to
    serve in critical leadership roles within the Administration.
        I welcome both of you. Congratulations on your nominations to these
    important offices.
        I see friends and family behind you and I welcome them here today,
    as well.
        The nominees before us are Kathy Kraninger, to be Director of the
    Bureau of Consumer Financial Protection and Kimberly Reed, to be
    President of the Export-Import Bank of the United States.
        These positions are critically important to protecting consumers in
    the consumer financial products and services marketplace, and
    facilitating global trade of U.S. goods and services.
        These nominees bring years of valuable experience at nonprofits and
    in public service, and will provide valued leadership in carrying out
    the missions of their agencies.
        Ms. Kraninger has had a distinguished career in public service with
    exposure to a diverse set of Federal agencies, as well as developing a
    particular expertise in the budget and appropriations processes.
        Since March 2017, Ms. Kraninger has served as Associate Director
    for General Government at the Office of Management and Budget where she
    oversees and monitors approximately $250 billion in budgetary resources
    for numerous Cabinet departments and Federal agencies.
        She has also served as OMB's principal policy official for issues
    related to the Treasury Department, Department of Housing and Urban
    Development, and Federal financial regulators.
        Prior to joining OMB, she held leadership positions at the
    Department of Transportation and the Department of Homeland Security,
    as well as serving on the staff of several congressional committees.
        Given her depth and diversity of public service experience, I have
    the utmost confidence that she is well-prepared to lead the Bureau in
    enforcing Federal consumer financial laws and protecting consumers in
    the financial marketplace.
        Ms. Reed was considered by this Committee last year as the nominee
    to serve as the First Vice President of the Export-Import Bank, and
    today we consider her nomination to be its President.
        Ms. Reed also has had a distinguished career in public service,
    previously serving as Senior Advisor to former Treasury Secretaries
    Paulson and Snow.
        In addition, she has served on several Congressional committees,
    and has held impressive leadership positions in the private sector.
        Ms. Reed is well-positioned to help move the Bank forward in a
    positive direction.
        With respect to Ms. Kraninger, some senators have requested a long
    list of documents, including, emails, schedules, involvement in memos,
    White House communications, etc., relating to Ms. Kraninger's role at
    OMB with respect to the Administration's ``Zero Tolerance Policy'' and
    the Administration's response to Hurricane Maria in Puerto Rico.
        These requests are designed to go after certain extraneous
    Administration policies that the requesters do not like, and go far
    beyond the practice of this Committee's document production.
        Indeed, I would not expect this Administration or any
    Administration to release documents related to an ongoing deliberative
    process.
        Further, my understanding is that Ms. Kraninger is not the
    custodian of the records and has given the request for information to
    the White House.
        The Democratic senators of this Committee asked me to delay this
    hearing until after the documents had been provided.
        I am unaware of the Banking Committee delaying a hearing for such a
    reason.
        To be consistent, I have followed a similar timeline as the
    Committee set for then-nominee Richard Cordray in 2013.
        As a reminder, the Senate received Mr. Cordray's official
    nomination from the President on February 13, 2013.
        Approximately 1 month later, on March 12, 2013, the Committee held
    a hearing to consider Mr. Cordray's nomination and voted the nominee
    out of Committee 1 week later on March 19.
        Similarly, the Senate received Ms. Kraninger's official nomination
    from the President on June 20, 2018.
        Approximately 1 month later, we are holding this hearing.
        She has provided all of the paperwork that the Banking Committee
    requires.
        The purpose of these hearings is to provide all senators of this
    Committee the opportunity to ask any questions of this nominee, who
    will be under oath.
        I intend to ask Ms. Kraninger--again, who will be under oath--about
    her role in developing policy at OMB.
        Other senators will be given the similar opportunity to question
    Ms. Kraninger, and to also follow up with questions for the record, as
    we traditionally do.
        I take the Senate's Constitutional authority seriously, and am
    confident that Ms. Kraninger will be sufficiently vetted, as have our
    previous nominees, for this Committee to provide a recommendation to
    the full Senate on this nomination.
        As a separate matter, many of us have experienced frustration with
    the Bureau in previous years.
        In April 2016, former Bureau Director Cordray testified before this
    Committee.
        Senators on the Committee sent questions for the record that same
    month.
        It took Director Cordray over 16 months to respond to this
    Committee.
        It is my hope that, if confirmed, Ms. Kraninger will be more
    accountable to senators on this Committee than Director Cordray was.
        I look forward to a vigorous debate and vote on the nominees.
                                     ______

                 PREPARED STATEMENT OF KATHLEEN LAURA KRANINGER
            To be Director, Bureau of Consumer Financial Protection
                                 July 19, 2018
        Chairman Crapo, Ranking Member Brown, Members of the Committee,
    thank you for the opportunity to appear before you today. It is a
    privilege to be here as the President's nominee for Director of the
    Bureau of Consumer Financial Protection. I want to thank President
    Trump for this honor and for the confidence he has placed in me with
    this nomination.
        I'd also like to express my deepest gratitude to my family and
    friends who have joined me today. In particular--my parents, Dave and
    Pat, are here from Cleveland, Ohio. My older brothers, Dave and Dan,
    and their families traveled from Wisconsin and Connecticut. My younger
    brother, Matt, and his family are watching online.
        I am incredibly lucky to have an amazing family who encouraged me
    in every endeavor and taught me that with hard work and dedication,
    anything is possible in this great country of ours. I am especially
    grateful for their steadfast support as I have followed my call to
    public service and pursued a career serving the American people.
        My love for our country, its ideals and promise, drives my
    commitment to public service. It sparked my interest in my university's
    summer internship program where I worked for my hometown Congressman,
    now Senator Brown. It inspired my decision to join the Peace Corps and
    volunteer for 2 years teaching in the former Soviet Union. There I saw
    firsthand the devastating impact of communism, the economic
    consequences of central planning, and the absence of free markets and
    the rule of law.
        Following the attacks on September 11th, 2001, I felt the call even
    more deeply, to help our country in a time of need. I'm very proud to
    have served on the leadership team at both the Departments of
    Transportation and Homeland Security during that extraordinarily
    challenging time. I have also been honored to serve three separate
    Congressional committees, including the Senate Appropriations Committee
    under Senator Shelby's leadership. In my current position as Associate
    Director at the Office of Management and Budget, I have had the
    opportunity to take a broader leadership role--overseeing $250 billion
    in budgetary resources and related policies for 7 Cabinet departments
    and 30 other Federal agencies, including the Bureau as well as the
    other financial regulators.
        Throughout my career, I have focused on implementing common-sense
    solutions to complex problems and delivering real value for the
    American people. While I will not prejudge and cannot predict every
    decision that will come before me as Director, if confirmed, I can
    assure you that I will focus solely on serving the American people.
        Congress established the Bureau of Consumer Financial Protection
    ``to ensure all consumers have access to markets for consumer financial
    products and services . . . that are fair, transparent, and
    competitive.'' I am firmly committed to satisfying this Congressional
    mandate. To do so, I would establish four initial priorities.
        First, the Bureau should be fair and transparent, ensuring its
    actions empower consumers to make good choices and provide certainty
    for market participants. In particular, the Bureau should make robust
    use of cost benefit analysis, as required by Congress, to facilitate
    competition and provide clear rules of the road. In my experience,
    effective use of notice and comment rulemaking is essential for
    ensuring the proper balancing of all interests. It also enables
    consideration of tailoring to reduce the burden of compliance,
    particularly on consumers and smaller marketplace participants.
        Second, the Bureau should work closely with the other financial
    regulators and the States on supervision and enforcement. Nothing is
    more destructive to competitive markets and consumer choice than
    fraudulent behavior. Under my stewardship, the Bureau will take
    aggressive action against bad actors who break the rules by engaging in
    fraud and other illegal activity.
        Third, the Bureau must recognize its profound duty to the American
    people to protect sensitive information in its possession. Under my
    leadership, the Bureau would limit data collection to what is needed
    and required under law and ensure that data is protected. This issue
    clearly needs more attention, particularly because many consumers are
    unaware of the vulnerabilities or unsure of what actions to take to
    protect themselves.
        And, fourth, the Bureau must be accountable to the American people
    for its actions, including its expenditure of resources.
        As a former Congressional staffer, I appreciate the important role
    Congress plays in overseeing this agency. I value the advice and
    perspectives you shared during our meetings over the past month--
    conversations that I welcome going forward, should I be confirmed in
    this important position.
        Thank you for your consideration.
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                     PREPARED STATEMENT OF KIMBERLY A. REED
                      To be President, Export-Import Bank
                                 July 19, 2018
        Chairman Crapo, Ranking Member Brown, Senators, thank you for the
    opportunity to appear before you today.
        Thank you as well for this Committee's favorable bipartisan vote to
    advance my previous nomination to serve as First Vice President of the
    Export-Import Bank of the United States (ExIm, Bank).
        I now return to you as the President's nominee to serve as
    President of ExIm, a position that includes serving as Chairman of the
    Bank's Board of Directors. I thank President Trump for his confidence
    in me to advance ExIm's mission: creating and supporting American jobs
    by facilitating the export of U.S. goods and services.
        If confirmed, I will be both the first woman and the first West
    Virginian to be President and Chairman of this 84-year-old institution.
        I also appreciate the encouragement and support of the President's
    National Economic Council Chairman Larry Kudlow and diverse
    organizations focused on American prosperity.
        I would like to recognize and thank my father Terry and sister
    Ashley. I lost my mother, Janet Logue Reed, to cancer when I was 9
    years old, and tomorrow would be her 70th birthday, so I send her my
    love and know that she is with us.
        I thank you for the encouraging and supportive individual meetings
    to discuss your views and the positive impact ExIm has made for the
    workers in your states, and the potential to do more to support them.
    If confirmed, I will work especially hard to maintain open lines of
    communication with you.
        I am grateful for the support of my home-State Senators Shelley
    Moore Capito and Joe Manchin. I would bring the grounding of my West
    Virginia upbringing to ExIm. In 1985, Senator Capito's father, Governor
    Arch Moore, bestowed upon me a golden horseshoe pin for an academic
    award that I wear today. Its inscription reads: ``Montani Semper
    Liberi''--``Mountaineers are Always Free.''
        I believe that freedom, in the form of free-market principles, is
    the best way to foster economic opportunity for all Americans.
    Throughout my 22 year career, I have embraced these principles to make
    a positive difference for our Nation's businesses and workers while
    also protecting the American taxpayer. I would bring these values to
    ExIm.
        Still, there is room for improvement to keep America on this road
    to prosperity, and ExIm is no exception. If confirmed, I will work to
    ensure that ExIm faithfully implements all laws and reforms enacted by
    the Congress. I would launch a review to ensure that ExIm truly is the
    ``bank of last resort'' and not the other way around.
        There are now 109 foreign Export Credit Agencies (ECAs) in other
    countries--up from 95 when I testified before you last November. (See
    Attachment.) ExIm recently reported on ``the increasing `weaponization'
    of export trade credit by the world's ECAs to complement increasingly
    nationalistic trade policies--particularly those initiated by China.''
    If confirmed, I look forward to working with the Administration and the
    Congress on an aggressive response to China's unfair trade policies.
        In a perfect world, there would be no ECA financing. If confirmed,
    I will work with the U.S. Government and, as appropriate, the OECD,
    G20, WTO, and other forums to move towards the ultimate goal of
    eliminating all ECA financing. On that you have my pledge.
        Until that goal is reached, the United States should not
    unilaterally disarm in a fiercely competitive global economy. While we
    negotiate, we should not place our Nation in a worse position than our
    foreign counterparts. As President Trump stated regarding export
    financing: ``[W]hen other countries give it, we lose a tremendous
    amount of business.''
        Therefore, if the Senate confirms a Bank Board quorum, I will take
    responsible steps to get ExIm operational so America can compete on a
    more level playing field. ExIm has more than $40 billion in pending
    applications supporting 250,000 U.S. jobs. We need to keep and support
    these jobs in the United States while we, at the same time, work to
    reform the export subsidies of our competitors to save even more. We
    can do both.
        ExIm also must treat all American companies fairly, especially
    small- and medium-enterprises. I would ensure that ExIm--working with
    community banks and community development financial institutions that I
    am so familiar with--helps small businesses and the agriculture sector,
    which is vital to rural America.
        In closing, I would like to underscore that good governance is
    critical. ExIm, which has a very low 0.4 percent default rate, is self
    sustaining because of the fees and loans it charges to the foreign
    purchasers, and has returned $14.6 billion to the U.S. Treasury since
    2000. We need to ensure that it stays that way.
        Building on my time working for the Congress on oversight,
    investigations, and Government reform, I would focus on strong
    standards of conduct, increased transparency, and sound risk management
    practices. I would work with you and our Inspector General to ensure we
    are doing all we can to eliminate waste, fraud, and abuse and give
    better value to the taxpayer.
        Thank you for your consideration. I would be pleased to answer any
    questions.
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