Credit union regulator McWatters on shortlist to head CFPB
J. Mark McWatters, chairman of the National Credit Union Administration, is on the shortlist to potentially head the Consumer Financial Protection Bureau, according to industry observers.
The move could help soften the sharp partisan fight that is brewing for whoever is tapped to take over the consumer agency — if President Trump ultimately chooses the credit union official.
“He’s pragmatic and measured, which will make it very difficult for Democrats to vilify him during the nomination process,” said Isaac Boltansky, an analyst at Compass Point Research & Trading.
Other names that have been floated in recent weeks include Todd Zywicki, a law professor at George Mason University; Rep. Jeb Hensarling, R-Texas, who chairs the House Financial Services Committee; and Keith Noreika, the former acting comptroller of the currency. Whoever is named to take over the bureau will have wide latitude to reshape it, following the departure of former director Richard Cordray, who resigned in November to run for governor of Ohio.
McWatters' name has not been previously publicly discussed, however.
It is unclear how soon Trump will announce his pick, but at least one source familiar with the situation said it could come early in January.
Critics on the left have vigorously protested Trump’s decision to name Mick Mulvaney, director of the Office of Management and Budget and a vocal critic of the CFPB, as the agency’s acting chief.
McWatters would potentially offer the administration another way forward. He was confirmed to head the credit union agency over the summer, suggesting he’d be able to secure the necessary votes. And while he’s solicited the CFPB to roll back its oversight of credit unions in several cases, McWatters has not openly criticized the consumer agency — its operations or its structure — as others being considered have done.
“It would be a smart pick because you get all of the conservative policymaking without the ideological rhetoric,” Boltansky said.
McWatters could also theoretically take Mulvaney's place as acting chairman while he awaits confirmation, if the Trump administration wanted to make the switch. Like Mulvaney, McWatters has already been confirmed by the Senate, making him eligible to serve as acting head of an agency under the Federal Vacancies Reform Act.
His nomination may draw opposition from banking groups, however, which are concerned with how close the NCUA is to the industry it regulates. Bankers frequently complain that the agency is not tough enough on credit unions.
A White House spokesperson did not respond to a request for comment.
While at NCUA, McWatters has has had his own demands for the CFPB.
He asked the consumer agency in May to exempt credit unions from expanded data collection and reporting requirements issued under the Home Mortgage Disclosure Act and to clarify the agency’s authority to oversee unfair, deceptive and abusive acts. In July, he requested that the consumer agency drop examination and enforcement for the largest credit unions.
McWatters, a lawyer and certified public accountant, has years of experience in both the public and private sectors. He previously served as a member of the Troubled Asset Relief Program’s congressional oversight panel and as an adviser to Hensarling.
He joined the NCUA board in 2014 under former President Obama, before being tapped as chairman of the agency in January under Trump. He served as acting chair from January through June, before being confirmed to the position by the Senate.
He was also tapped by Obama in 2016 to serve as head of the Export-Import Bank, although his nomination was ultimately blocked by Sen. Richard Shelby, R-Ala., the chairman of the Banking Committee at the time, over Shelby’s opposition to the agency’s existence.
Before joining the NCUA, McWatters was assistant dean for graduate programs, a professor of practice at the Southern Methodist University Dedman School of Law and an adjunct professor at the university’s Cox School of Business. He’s also been a partner at three international law firms and served as counsel to a hedge and private equity firm.