Trump’s new pick to run consumer finance watchdog to face Senate

By Douglas Gillison

WASHINGTON, July 23 (Reuters) – Capital One executive Brian Johnson is due to appear before U.S. lawmakers on Thursday as they consider his nomination to lead the U.S. Consumer Financial Protection Bureau, which President Donald Trump’s administration has tried unsuccessfully to shut down.

Johnson, who served as a top Republican CFPB official during Trump’s first term, currently is in a credit card compliance role for Capital One and his arrival could mark a turning point in the administration’s handling of the agency. 

The Senate Banking Committee, which is considering the nomination, is currently controlled by Republican allies of the president. 

Congress created the CFPB following the 2008 financial crash to prevent predatory lending and other misconduct in consumer financial products. Republicans have long attacked the agency as a politicized burden on free enterprise while defenders say it has returned billions to harmed consumers. 

Johnson did not respond to a request for comment. His nomination is the third to lead the agency since Trump returned to office last year, though the White House withdrew both prior nominees.

During that time, acting Director Russell Vought halted virtually all agency activities and sought to fire the vast majority of its staff, saying the agency was “woke” and would be abolished. Federal courts have so far blocked this.

Widely seen as a knowledgeable industry insider, Johnson has in the past also been a vocal critic of the CFPB. David Silberman, a former CFPB official whose tenure overlapped with Johnson’s, said he expected 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,” said Silberman.

ETHICS QUESTIONS

Aside from Capital One, ethics documents show Johnson has professional ties from private sector work to companies and former clients that are also regulated by the CFPB, including the major banks operating the money transfer service Zelle.

Under Vought, the agency has dropped a string of enforcement actions and settlements, including those involving Capital One and Zelle.

With his spouse, Johnson declared net assets of between $336,000 and $2.7 million in retirement savings and other investments, according to financial disclosures, as well as salary and bonus payments from Capital One of roughly $740,000. If confirmed, he has agreed to forfeit between a quarter and a half million dollars in unvested Capital One shares.

The bank has waived requirements that Johnson repay some or all of his bonus payments, and as a result he will recuse himself from matters related to Capital One for two years, according to an ethics agreement.

Capital One did not immediately respond to a request for comment.

(Reporting by Douglas Gillison in Washington; additional reporting by Chris Prentice in New York; Editing by Lincoln Feast.)