CFPB's assistant director for enforcement resigns: Sources

Kristen Donoghue, the head of enforcement at the Consumer Financial Protection Bureau, has resigned, sources said.

Donoghue, an assistant CFPB director for enforcement, was one of the few remaining senior managers hired by former Director Richard Cordray. She joined the CFPB in 2011 and early on worked alongside now-Sen. Elizabeth Warren, D-Mass., who first proposed and helped established the agency.

Donoghue’s resignation comes less than a week after Eric Blankenstein — the CFPB’s policy director for supervision, enforcement and fair lending — also resigned.

Cara Petersen, the principal deputy to the assistant director for enforcement, was named acting director for enforcement, according to sources familiar with the matter. Jeff Ehrlich, the current deputy enforcement director, will become principal deputy for enforcement.

Donoghue has held several positions at the CFPB including principal deputy enforcement director, assistant litigation deputy and deputy enforcement director for policy and strategy. Donoghue had been a litigation attorney at Hogan Lovells for more than a decade before joining the CFPB.

Her resignation presents a challenge for CFPB Director Kathy Kraninger. It is unclear yet if Kraninger plans to follow in the footsteps of former acting CFPB Director Mick Mulvaney, by filling top leadership positions with political appointees.

Donoghue became the second senior leader at the CFPB to question why her boss, Blankenstein, remained the head of supervision, enforcement and fair lending given that he had suggested in past writings that most hate crimes were “hoaxes.”

“The language used, and sentiments expressed, are completely unacceptable and call into question Eric’s ability to lead the fair lending program specifically, and the division generally,” Donoghue wrote in an email to staff last year.

At the time, Donoghue said her feelings were shared by the entire enforcement division of roughly 100 attorneys.