By Michelle Price

WASHINGTON (Reuters) – Kathy Kraninger has resigned effective immediately as director of the U.S. consumer watchdog at the request of President Joe Biden’s administration, she tweeted shortly after Biden was sworn in on Wednesday, paving the way for the new president to quickly install an interim agency head.

Kraninger was appointed by former Republican President Donald Trump to serve a five year term as director of the Consumer Financial Protection Bureau (CFPB) ending in 2023.

Last year, however, the Supreme Court ruled in favor of a challenge, backed by the Trump administration and long-supported by most Republicans, which argued that the CFPB director served at the president’s will.

Biden’s transition team made it clear on Monday that his White House was willing to test that new power if Kraninger did not resign when it announced that he planned to nominate Federal Trade Commission member Rohit Chopra to replace Kraninger.

“I support the Constitutional prerogative of the President to appoint senior officials within the government who support the President’s policy priorities, which ensures our government is responsive to the will of the people,” Kraninger wrote in her resignation letter.

It was unclear whether the White House planned to install Chopra as acting CFPB director pending his Senate confirmation, or whether Kraninger’s deputy or another CFPB staffer would lead the agency in the interim.

The CFPB has been a political lightning rod since it was created following the 2009 financial crisis, beloved by Democrats as a guardian of ordinary Americans but reviled by Republicans as too powerful and unaccountable.

Consumer groups have fiercely criticized Kraninger for defanging the agency by relaxing enforcement and easing rules on payday lending, mortgage lending, and debt collection.

On Wednesday, Kraninger appeared to rebut those criticisms, writing that she had “focused on implementing common-sense solutions to complex problems and delivering real value for the American people.”

(Additional reporting by Pete Schroeder; Editing by Chizu Nomiyama)