[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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            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.
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                 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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