The White House announced on Monday the nomination of Kathy Kraninger as head of the Consumer Financial Protection Bureau (CFPB) to replace acting director Mick Mulvaney.  The appointment caught many in Washington by surprise as Kraninger is not widely known and has not previously been active in the consumer arena according to many reports. 

Kraninger has been an associate director at the Office of Management and Budget (OMB), which Mulvaney also serves as director, for about a year.  At OMB she oversees $250 billion in funding for seven cabinet departments and 30 agencies, including the Department of Homeland Security.  Her previous role was as a staff member of the Senate Appropriations Subcommittee on Homeland Security.  She has also worked for the Department of Transportation.

Looking beyond her qualifications, Market Watch reports that Mulvaney would have had to leave his post as acting director by June 22 if no permanent nominee had been named.  He was appointed to replace the agency's first director, Richard Cordray, who resigned last fall to run for the office of Ohio governor.  Under obscure Washington rules Mulvaney can now stay on until a replacement is confirmed by the Senate, a process that could take months.

Also, according to MarketWatch, that confirmation process is likely to be a contentious one. Critics are already going public. 

The LA Times quoted Bartlett Naylor, a financial policy advocate at Public Citizen who said, "Kraninger ... has neither experience as a regulator nor expertise in consumer financial issues. The nation's leading consumer financial regulator is not an entry-level job."

J.W. Verret, an assistant professor at George Mason University's Antonin Scalia Law School and an expert on financial regulation said he was shocked at the appointment and is organizing opposition to the nomination among conservative and consumer credit legal scholars.

A White House spokesman defended the pick, saying Kraninger "will bring a fresh perspective and much-needed management experience" to the consumer bureau and Jeb Hensarling,  House Financial Services Committee Chairman and a staunch critic of CFPB, commended the nomination. 

The Mortgage Bankers Association (MBA) issued a statement expressing pleasure at the announcement.  "Based on her background and experience, we look forward to hearing her views about how to improve the Bureau's oversight and operations, and how she will leverage the information gathered from the ongoing RFI process to protect consumers from unscrupulous practices while also ensuring they enjoy access to safe, sustainable loan products."

 Jaret Seiberg, an analyst with brokerage and investment bank Cowen & Co., wrote in a research note Monday that, not only will the nomination allow Mulvaney to continue his ramping down of the agency's regulatory activities and lobbying for a change in the Bureau's structure, but Kraninger has the advantage of being able to remain in her OMB job during the confirmation process. If she were employed in the private sector, Seiberg said, tradition would mandate she resign immediately because of potential conflicts of interest with work related to the bureau's oversight. 

"We see the nomination of Kathy Kraninger as a way to keep OMB Director Mick Mulvaney in charge of the Consumer Financial Protection Bureau for years to come without the need to ever get someone confirmed," Seiberg wrote.