Will a New Consumer Bureau Director Heed the Agency’s Mission?

In her first news conference as a Senate-confirmed Director of the Consumer Financial Protection Bureau (CFPB), Kathleen Kraninger’s remarks sounded a lot like Mick Mulvaney, her former boss at the Office of Budget and Management (OMB). On December 11, just one day into a five-year term of office, Kraninger told reporters she would continue the business-friendly work begun by Mulvaney.

Days earlier on December 6, Kraninger was confirmed to the position by a 50-49 party line vote. However, a broad and diverse coalition comprised of national and state organizations have pledged to valiantly stand up for consumers and their financial rights. 

Labor advocates like the AFL-CIO and the Service Employees International Union (SEIU), as well as civil rights stalwarts NAACP, Unidos US (formerly the National Council of LaRaza) and the Leadership Conference on Civil and Human Rights, and consumer advocates like Americans for Financial Reform and Center for Responsible Lending are all among the advocates lending their names and influence on the effort.

“She won’t answer questions. She won’t release documents. She let industry attend her swearing in but not the public. Now she’s forcing important members of the media out of the room during her first press availability as CFPB director. What is Kathy Kraninger hiding,” asked Karl Frisch, executive director of Allied Progress.

“This is not how a CFPB director committed to transparency and accountability operates. We deserve better,” added Frisch. 

Kraninger arrives to CFPB’s top job with no experience protecting consumers nor in financial regulation. Neither does she bring experience in directing a large government agency. While at OMB, she was considered a mid-level appointee.

Earlier and in a series of replies to questions from the Senate Committee on Banking, Housing and Urban Affairs, one of the questions posed was, “Can you identify any actions he [Mulvaney] has taken that you disagree with and explain why you disagree?” 

Kraninger’s response was, “I cannot identify any actions that Acting Director Mulvaney has taken with which I disagree.”     

Under Mulvaney’s leadership, the CFPB was transformed from a vigilant consumer advocate into a servant to corporations. Just a few of the anti-consumer actions taken by Mulvaney include a lack of enforcement of the nation’s fair lending laws, rollbacks of consumer protections, and suppression of the CFPB’s Student Loan Ombudsman report that found how high fees were charged to college students by major banks. 

Most importantly, even in the handful of cases brought under Mulvaney, financial actors who defrauded and abused consumers, next to nothing was paid in restitution – monies that could help make consumers whole financially. Instead of enforcement, many consumer activists would view that lack of action as simply a business-friendly pass.

For the nation’s consumers, however, financial fairness – rules that eliminate debt traps including payday loans, as well as restitution from lawsuits that earlier returned nearly $12 billion to those who had been financially harmed — could seem like CFPB’s history but not its current focus. 

What happens over the next five years will test the mettle of those who fought to create an agency given the mission to protect consumer finances against profiteers who argue that baseline protections for consumers are an unnecessary burden to business.

“[Donald] Trump and his appointees have done everything in their power to undermine the Consumer Bureau. Mick Mulvaney, who Trump installed to serve as Acting Director of the agency, dropped lawsuits and investigations into abusive payday lenders, took away the Office of Fair Lending and Equal Opportunity’s enforcement powers, fired the members of the agency’s Consumer Advisory Board, scaled back enforcement actions against bad actors, sought to slash the agency’s budget, and apparently made it his mission to help out bad actors,” said Congresswoman Maxine Waters.

This long-time California Representative is expected to chair the House Financial Services Committee in the new Congress. In the current Congress, she serves as the Committee’s Ranking Member. 

Some consumer advocates prefer to give Kraninger the benefit of the doubt, hoping that the new Bureau Director will do the right thing.

“If Kraninger plans on taking her public duty seriously, she should commit to implementing the Payday Rule as written and put the CFPB back on the track of protecting consumers from financial misconduct,” said Yana Miles, Senior Legislative Counsel with the Center for Responsible Lending.

“Kraninger has a clear choice to make,” noted Jose Alcoff, Payday Campaign Manager at Americans for Financial Reform, “she can faithfully uphold the mission of the consumer bureau to protect families from the financial industry’s worst abuses or she can continue Mulvaney’s playbook of catering to predatory lenders at the expense of the 99 percent.”