Finance
Senators grill Trump CFPB pick, Jonathan McKernan: ‘Good luck’
Jonathan McKernan, U.S. President Donald Trump’s nominee to be the director of the Consumer Financial Protection Bureau, sits on the day he testifies during a Senate Banking, Housing and Urban Affairs Committee confirmation hearing on Capitol Hill in Washington, D.C., U.S., February 27, 2025.
Annabelle Gordon | Reuters
President Donald Trump’s pick to lead the Consumer Financial Protection Bureau on Thursday withstood grilling from Democrat senators who repeatedly asked him to confirm that he would uphold his legal obligations to run the agency.
Pressed by senators including Elizabeth Warren of Massachusetts, Jonathan McKernan, a former Federal Deposit Insurance Corporation board member, told lawmakers he would “fully and faithfully” enforce laws related to the CFPB’s mission.
“My legal career started just as the 2008 financial crisis was beginning,” McKernan said. “Watching that crisis unfold left me with an enduring conviction that we must have a financial regulatory system that works for everyday Americans. Consumer protection is critical to that end.”
Still, McKernan made it clear that he disagreed with how predecessor Rohit Chopra ran the agency. In opening remarks, he said that the CFPB “acted in a politicized manner,” exceeded its legal authority, hurt consumers by inadvertently raising prices and suffered from a “crisis of legitimacy.”
“This must be corrected if the CFPB is to reliably do what it’s supposed to do: look out for the American consumer,” said McKernan, a former corporate banking lawyer and Senate aide.
Since acting CFPB Director Russell Vought took over this month, the agency has shuttered its Washington headquarters, fired about 200 employees and told those who remain to stop nearly all work. Those moves, along with an allegation from a CFPB union that Vought intends to fire more than 95% of the agency’s staff, has spurred fears that the agency faces extinction.
Earlier Thursday, the CFPB dismissed at least four enforcement lawsuits, including actions against Capital One and a Berkshire Hathaway unit.
U.S. Sen. Elizabeth Warren (D-MA) speaks at a rally outside the Consumer Financial Protection Bureau (CFPB) on Feb. 10, 2025 in Washington, DC.
Anna Moneymaker | Getty Images
Warren pressed McKernan on if he would uphold CFPB’s statutory requirements, including having a website and toll-free line for consumer complaints, as well as maintaining advocacy offices for military veterans and senior citizens.
“Each of the offices I think you mentioned is mandated by statute,” McKernan said. “Yes, I’ll follow the law.”
Rattling off a list of public comments and steps made by the Trump administration that indicate the bureau could be shuttered entirely, Warren questioned how effective McKernan could be.
“It kind of feels like you’ve been lined up to be the No. 1 horse at the glue factory,” Warren said.
For his part, McKernan said that if confirmed by the Senate, he would “right-size” the CFPB, as well as “refocus it” and “make it accountable.”
Sen. Jack Reed, D.-R.I., followed up, adding that Vought has canceled the lease on the agency’s headquarters and dismissed cases against “predatory lenders.” Reed also mentioned reporting that both Trump and Vought, who is also head of the Office of Management and Budget, want to eliminate the bureau.
“You’re going to be placed in a very difficult position,” Reed said. “You do not appear to have much presidential support or OMB support, and I have this sinking feeling that you’re departing Liverpool on the Titanic. Good luck.”
McKernan didn’t verbally respond to Reed’s comment, only smiling ruefully while nodding slightly.
It appears T. Rowe Price is benefitting from the record growth in actively managed exchange traded funds.
Tim Coyne, the firm’s head of ETFs, reports the firm is seeing significant growth in the area — listing the T. Rowe Price Capital Appreciation Equity ETF (TCAF) and T. Rowe Price U.S. Equity Research ETF (TSPA) as two established strategies that can satisfy investor demand.
“I think having that professionally managed portfolio is really beneficial to clients,” Coyne told CNBC’s “ETF Edge” this week. “We’re seeing just… greater volatility [and] uncertainty across both the equity and fixed income markets.“
According to Coyne, the T. Rowe Price Capital Appreciation Equity ETF suits investors who are looking for long-term growth.
“The objective of the fund is to outperform the S&P 500 with lower volatility and greater tax efficiency,” he said. “It’s also a more concentrated portfolio, typically holding around a hundred names.”
As of April 24, the fund’s top holdings include Microsoft, Amazon, and Apple according to the T. Rowe Price website. But it’s not all Big Tech. The ETF also features smaller positions in companies like Becton Dickinson and Roper Technologies.
The T. Rowe Price Capital Appreciation Equity ETF is down about 5% so far this year while the S&P 500 is off about 7% However, the ETF is up close to 8% over the past year — roughly identical to the S&P 500’s performance.
Coyne notes the T. Rowe Price U.S. Equity Research ETF follows a similar strategy, but with a heavier weighting in top tech stocks.
“This is more of a large-cap growth product [T Rowe Price U.S. Equity Research ETF],” he said. “There are components of characteristics of both passive and active here. This fund is actually managed by our North American directors of research. So again, strong fundamental research is going into the stock selection.”
Both the T. Rowe Price U.S. Equity Research ETF and S&P 500 are down around 7% since the beginning of the year. Meanwhile, the fund is up almost 9% over the past year. That’s less than one percent better than the S&P 500’s performance.
T. Rowe Price U.S. Equity Research ETF vs. S&P 500
‘Some form of bear market’
Strategas Securities’ Todd Sohn thinks investment demand for active managers will continue to be strong.
“This is the type of the environment where it [active management] can actually shine,” the firm’s senior ETF and technical strategist said. “We are in some form of bear market. This is where the active manager really can come into hand and offer their solution they are doing right.”
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