Key Takeaways:
Brian Johnson, President Donald Trump's pick to lead the Consumer Financial Protection Bureau, told lawmakers Thursday he has not decided whether to pursue plans to fire the vast majority of the agency's staff, as Democrats accused him of enabling a pay-to-play system that has dropped 42 enforcement cases against presidential donors.
"I have an open mind about staffing levels for offices," Johnson, a Capital One Financial vice president who served as the CFPB's deputy director during Trump's first term, said at a Senate Banking Committee hearing. His response came after Sen. Ruben Gallego, Democrat of Arizona, asked whether he agreed with acting Director Russell Vought's plan to slash the number of agency examiners to 77 from 350.
The exchange underscored the stakes for the consumer watchdog, which Congress created after the 2008 financial crisis to police predatory lending. Republicans have long attacked the bureau as an overreach of government power, while defenders say it has returned more than $19 billion to harmed consumers since its inception. Vought, who also serves as White House Office of Management and Budget director, has halted virtually all agency activities and sought to eliminate most of its staff, though federal courts have so far blocked those efforts.
Sen. Elizabeth Warren, the Massachusetts Democrat who originally conceived the CFPB, pressed Johnson on whether he would cooperate with congressional oversight after the bureau dropped a lawsuit against Capital One shortly after the credit card issuer donated $1 million to Trump's inauguration. Warren noted that 42 enforcement cases — including actions against Apple Inc., Bank of America Corp., JPMorgan Chase & Co., Toyota Motor Corp., Walmart Inc. and Meta Platforms Inc. — were dropped after those companies made donations to the president. "Will you agree to notify us if you get a call about a political donor from the Trump family?" Warren asked. Johnson replied: "With respect, I dispute the premise of the question."
Johnson's nomination is the third attempt by the Trump administration to install a permanent director since the president returned to office last year, after the White House withdrew both prior nominees. If confirmed, Johnson has agreed to forfeit between $250,000 and $500,000 in unvested Capital One shares and has signed an ethics pledge to recuse himself for two years from matters involving his former employer. His financial disclosure showed net assets of between $336,000 and $2.7 million, plus roughly $740,000 in salary and bonus from Capital One.
The nominee also faces questions about his ties to other regulated entities. Ethics documents show Johnson has professional connections to companies operating the Zelle payments network, which was also the subject of a CFPB enforcement action that Vought dropped. Johnson declined to identify any actions taken by Vought that he disagreed with, signaling continuity with the acting director's approach.
In one unexpected exchange, Sen. Bernie Moreno, an Ohio Republican and former car dealer, asked Johnson to investigate online auto platform Carvana Co., which Moreno said approves nearly 100 percent of its customers for credit. "Having been in the car business for a long time, that doesn't exist," Moreno said. Johnson replied he would "be happy to take a look" — a notable response given that the Dodd-Frank Act specifically excludes most auto dealers from the CFPB's direct oversight, and Republican lawmakers have consistently opposed bureau authority in the auto sector.
The Senate Banking Committee, controlled by Trump's Republican allies, is expected to advance Johnson's nomination. If confirmed, he would inherit an agency that Vought has described as "woke" and sought to abolish. David Silberman, a former CFPB official whose tenure overlapped with Johnson's, said he expects Johnson would not seek to kill the agency. "I do not think he would pursue an agenda of decapitating the CFPB although I believe he will feel obligated to carry out the president's directives and policy priorities," Silberman said.
This article is for informational purposes only and does not constitute investment advice.
