03-25-2019  4:58 pm      •     
scales of justice
Allied Progress
Published: 04 March 2019

WASHINGTON, D.C. – Ahead of CFPB Director Kathy Kraninger’s appearance before the House Financial Services Committee this week, consumer advocacy group Allied Progress, represented by American Oversight, filed a Freedom of Information Act (FOIA) lawsuit against the CFPB seeking information that would shed light on why Eric Blankenstein remains a Policy Associate Director at the CFPB despite the fireable revelations in September 2018 that Blankenstein authored numerous racist and sexist blog posts as early as 2004 and as recently as 2016.

In early October, Allied Progress filed five FOIA requests with the CFPB requesting email correspondence from numerous bureau officials, including Eric Blankenstein, in the days following the Washington Post’sreport that Blankenstein had published a blog under a pen name where he expressed racist and sexist views. Allied Progress’ requests included emails related to an all-staff email sent by Patrice Ficklin, the Assistant Director of Fair Lending & Equal Opportunity, who publicly withdrew her initial statement of support for Blankenstein, requested on deadline by Blankenstein himself, and then voiced concerns about his ability to enforce fair lending after reading his troubling blog posts. Despite multiple attempts by Allied Progress to contact the CFPB by phone and email to discuss the five FOIA requests, the CFPB has failed to provide any of the requested documents.

The lawsuit comes just days after the U.S. House Financial Services Subcommittee on Diversity and Inclusion held a hearing on “Diversity Trends in the Financial Services Industry.” It also follows the CFPB’s Fall 2018 Semi-Annual Report to Congress that acknowledged the agency did not file a single fair lending public enforcement action from the time of former Director Richard Cordray’s departure in November 2017 through September 30, 2018 and that the Bureau chose to not initiate or refer any matters to the Department of Justice related to discrimination, despite the Bureau receiving approximately 329,000 complaints from April 1 -- September 30, 2018.

“The CFPB is tasked with protecting consumers from financial predators, not protecting officials from accountability for racism. The public has a right to know how much time and effort senior Trump administration officials, including Mick Mulvaney, spent shielding Blankenstein and keeping him in his job,” said Austin Evers, Executive Director of American Oversight.

“This cannot be allowed to become just another Trump administration scandal,” said Kyle Herrig, senior advisor to Allied Progress. “There is simply too much at stake to accept that someone who holds racist views – views Blankenstein tellingly never apologized for – is currently overseeing, with cruel irony, the CFPB’s efforts enforce consumer protection laws for ALL Americans. Current Director Kathy Kraninger has never weighed in publicly about the controversy, but we hope this lawsuit will change that.”

Eric Blankenstein should have been fired immediately last September. But then-Acting CFPB Director Mick Mulvaney kept his handpicked lieutenant in place in the face of internal revolt from CFPB staff and demands for Blankenstein’s ouster from a chorus of consumer advocacy and civil rights groups and members of Congress. The public deserves to know how and why this decision was made. The man who was hired to oversee CFPB’s fair lending enforcement has lost all public trust that he can ensure that African Americans and other minorities will receive fair, non-discriminatory access to credit in light of his history of trafficking in hate as recently as a few years ago. This is especially concerning after Mulvaney gutted the CFPB’s enforcement powers and made it easier for lending discrimination to take place -- policies which Kraninger has carried on with a smile.

Added Herrig: “As long as Blankenstein continues to draw a hefty taxpayer salary, consumers are left to assume that Kathy Kraninger either doesn’t care about his views, or worse, approves of a racist overseeing lending discrimination matters in her agency. But based on the recent CFPB report, it’s clear the Trump administration hasn’t cared about consumers being exploited for some time now.”

Allied Progress is a consumer watchdog organization that uses hard-hitting research and creative campaigns to hold Wall Street special interests and their allies in Congress and the White House accountable.

American Oversight is a non-partisan, nonprofit ethics watchdog and is the top Freedom of Information Act litigator investigating the Trump administration. American Oversight has filed more than 60 public records lawsuits since March 2017, uncovering and publishing tens of thousands of documents including senior officials’ calendars, emails, and expense records.

WHAT YOU NEED TO KNOW:

In September, The Washington Post Reported On Eric Blankenstein’s Blog Posts From Years Earlier, In Which He Questioned If Using The N-Word Was Racist And Claimed That The Majority Of Hate Crimes Were Hoaxes.

On September 26, The Washington PostReported That Eric Blankenstein, The Political Appointee Responsible For Enforcing Fair Lending Laws At The CFPB, Had Written Blog Posts Under A Pen Name In Which He Questioned “If Using The N-Word Was Inherently Racist And Claimed That The Great Majority Of Hate Crimes Were Hoaxes.” “A senior Trump appointee responsible for enforcing laws against financial discrimination once questioned in blog posts written under a pen name if using the n-word was inherently racist and claimed that the great majority of hate crimes were hoaxes. Eric Blankenstein, a policy director at the Consumer Financial Protection Bureau, expressed those and other controversial views more than a decade ago on a political blog he co-authored with two other anonymous contributors.” [Robert O'Harrow Jr., Renae Merle and Shawn Boburg, “Trump anti-discrimination official once called most hate crimes hoaxes,” The Washington Post, 09/26/18]

Eric Blankenstein’s Blog Contained Numerous Racist And Sexist Comments, Including Suggesting That Using The N-Word Isn’t Racist And That Most Hate Crimes Are “Hoaxes.”

Blankenstein Implied That Calling Someone The N-Word Didn’t Make Them A Racist, But Rather It Made Them An “‘Asshole.’”In a blog post discussing hate crime policies at the University of Virginia, Eric Blankenstein questioned whether or not calling someone “‘nigger'” in fact makes someone “‘racist, or just assholes looking for the most convenient way to get under [someone’s] skin?'” [“Hate Crimes vs. Crimes,” Two Guys Chatting, 09/30/04]

Blankenstein Claimed That “Hate-Crime Hoaxes Are About Three Times As Prevalent As Actual Hate Crimes.”In a blog post discussing hate crime policies at the University of Virginia, Eric Blankenstein wrote that most hate crimes “‘are in fact hoaxes,’” adding “hate-crime hoaxes are about three times as prevalent as actual hate crimes.” [“Hate Crimes vs. Crimes,” Two Guys Chatting, 09/30/04]

Blankenstein Suggested That Because Many Hate Crimes Are “Hoaxes,” They Should Not Necessarily Be Governed Under UVA’s Strict “Honor System” Until “A Hood Wearing KKK Member Is Caught.”In response to the notion that a hate crime should fall under UVA’s “honor system… [which] employs the single sanction of expulsion to uphold the highest standard of academic integrity at the University,” Eric Blankenstein asked, given the severity of the punishment, “why should the University be taking any action until it is proven?” He went on to say, “Until a hood wearing KKK member is caught, why should the honor system be changed?” [“Hate Crimes vs. Crimes,” Two Guys Chatting, 09/30/04 and Lauren Todd Pappa, “U. Virginia divided over sanction,” Cavalier Daily, 11/17/04]

Blankenstein Associated “Racial Idiocy” with University of Virginia’s Dean Of African American Affairs and President of the Albemarle-Charlottesville NAACP. On September 30, 2004, a conversation involving Eric Blankenstein was posted on his blog “Two Guys Chatting.” Blankenstein appeared to initiate the conversation, saying “So, there is more racial idiocy at UVa.” His conversation partner responded, “well, it’s can’t be any worse than the African City in Detroit,” to which Blankenstein said, “Well, Dean Turner is involved, so you never know.” Blankenstein then said, “Go to www.discriminations.us and read the first post.” [“Hate Crimes vs. Crimes,” Two Guys Chatting, 09/30/04]

Blankenstein Appeared To Blame A Woman’s Right To Choose As The Reason For A Pregnant Woman Being Murdered.Eric Blankenstein implied that abortion laws were partially to blame for a case where a man murdered the mother of his child to avoid paying child support. Blankenstein discussed the case in the context of how women can “dissaociate” themselves from a pregnancy via abortion, but men cannot. Blankenstein implied that the murder case he discussed was a consequence of that imbalance. [“Another question….,” Two Guys Chatting, 12/19/04]

Blankenstein Thinks Abortions And Abandoning Children In Dumpsters Are The Same Thing. Eric Blankenstein claimed that having an abortion is the same as having a “child in an alley and [leaving] it in a garbage dumpster. [“Party Inclusiveness/Abortion,” Two Guys Chatting, 09/10/04]

Blankenstein Lamented That Women Can “‘[Fuck] Someone [They] Shouldn’t Have’”And Use Abortion To “‘Get Rid Of The Problem'” When Men Can’t. In a blog post, Eric Blankenstein lamented that women can get an abortion when they “fuck someone [they] shouldn’t have” to “get rid of the problem,” but men don’t have the same right. [“Party Inclusiveness/Abortion,” Two Guys Chatting, 09/10/04]

Eric Blankenstein Faced “Open Rebellion” In The CFPB’s Fair Lending Office After Reports Of His Blog Surfaced.

Eric Blankenstein “Faced Open Rebellion From Subordinates” After Reports Of His Racially Charged Blog Posts Came To Light. “A senior Trump appointee at an agency responsible for enforcing laws against financial discrimination faced open rebellion from subordinates Friday over blog posts he wrote years ago expressing controversial views on the n-word and hate crimes, according to internal emails obtained by The Washington Post. The uproar came as two Democrats on the Senate Banking Committee and a national housing rights organization called for the departure of the appointee, Eric Blankenstein, a policy director at the Consumer Financial Protection Bureau. The upheaval was triggered by a mass email from a senior civil servant who harshly criticized the writings, which The Post revealed and linked to Blankenstein in a report Wednesday. Writing under a pen name in 2004, Blankenstein questioned whether the n-word was inherently racist and claimed that the great majority of hate crimes were hoaxes.” [Robert O'Harrow Jr., Renae Merle and Shawn Boburg, “Trump anti-discrimination official faces rebellion at agency over racially tinged blog posts,” The Washington Post, 09/28/18]

Fair Lending Head Patrice Ficklin Withdrew Her Initial Support Of Blankenstein After Reading His Racially Charged Blog Posts—And Questioned His Ability To Enforce Fair Lending Policy.

Patrice Ficklin, The Head Of The CFPB’s Fair Lending Office, Initially Issued A Statement In Support Of Eric Blankenstein, But Said, In An Email To Staff Two Days Later, That “She Had Not Read The Blog Posts At The Time” And Had Pulled Her Support Of Blankenstein. “The head of the Consumer Financial Protection Bureau’s fair- lending office said Friday she has grave doubts about a proposed restructuring of her office after reading blog posts written more than a decade ago by a top agency aide. Patrice Ficklin, the director of the office, sent an email to staff on Friday afternoon saying she no longer supports Eric Blankenstein, the CFPB’s policy director for supervision, enforcement and fair lending. The Washington Post reported Wednesday that Blankenstein wrote in blogs 14 years ago that a majority of hate crimes were hoaxes and that using a racial slur did not necessarily make someone a racist. Ficklin initially was quoted by the Post supporting Blankenstein, but in her email Friday said she had not read the blog posts at the time and now has pulled her support.” [Kate Berry and Rachel Witkowski, “Top CFPB official yanks support for political appointee over past writings,” American Banker, 09/28/18]

• Ficklin Raised Concerns About Blankenstein’s Ability To Manage The CFPB’s Fair Lending Program In Light Of His Comments. “‘I have had experiences that have raised concerns that are now quite alarming in light of the content of his blog posts — experiences that call into question Eric’s ability and intent to carry out his and the Acting Director’s repeated yet unsubstantiated commitment to a continued strong fair lending program under governing legal precedent,’ she wrote in the email, a copy of which was obtained by American Banker.” [Kate Berry and Rachel Witkowski, “Top CFPB official yanks support for political appointee over past writings,” American Banker, 09/28/18]

CFPB Chief of Staff Kirsten Sutton Mork Tried To Interfere With Patrice Ficklin’s Email Publicly Pulling Her Support Of Eric Blankenstein. “On Friday, shortly after noon, Ficklin shared a copy of her planned email with Blankenstein and other political officials, saying she intended to send it to a wider group. At 1:38 p.m., Blankenstein wrote an email appealing to her to hold off. Minutes later, the bureau’s chief of staff, Kirsten Sutton, made her own appeal.  ‘I am trying to reach you,’ Sutton wrote in an email to Ficklin. ‘Please do not send this until we’ve had the chance to connect.’ Seven minutes later, Ficklin notified Mulvaney and seven other top agency officials that she was proceeding.” [Robert O'Harrow Jr., Renae Merle and Shawn Boburg, “Trump anti-discrimination official faces rebellion at agency over racially tinged blog posts,” The Washington Post, 09/28/18]

Mulvaney Moved The Bureau’s Office of Fair Lending And Equal Opportunity Under His Direct Control…Weakening Its Authority.

In February 2018, Mick Mulvaney Moved The CFPB’s Office Of Fair Lending And Equal Opportunity Out Of The Bureau’s Enforcement Division And Under His Direct Control. “CFPB Acting Director Mulvaney, in a previously unreported move, said that he would be putting the Office of Fair Lending and Equal Opportunity, or OFLEO, under his direct control, startling consumer protection and civil rights advocates, and raising concerns that the office would be unable to carry out its mission — and that, indeed, that was the very purpose of the shift.” [David Dayen, “After Boasting About Lowering Black Unemployment, Donald Trump Undermines The Federal Unit Defending Against Housing Discrimination]

Senator Elizabeth Warren Warned About This Change When It Was First Announced, Arguing, “‘Mulvaney Is Putting the Office Of Fair Lending Under His Control So He Can Weaken It.’” Senator Elizabeth Warren (D-MA) “noted that the fair-lending office will now technically be under the ‘director's office,’ along with Office of Equal Opportunity and Fairness, giving Mulvaney greater control. ‘Mulvaney is putting the Office of Fair Lending under his control so that he can weaken it — leaving neighborhoods and consumers across the country more vulnerable to bias,” Warren said in an emailed statement.” [Kate Berry, “CFPB's Mulvaney strips his fair-lending office of enforcement powers,” American Banker, 02/01/18]

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