“You are really helping drive the agenda.”
— Kraninger to Audience of Bankers, 11/21/19
Read Allied Progress Report: “A Year of Failing Consumers”
WASHINGTON, D.C. — Today marks CFPB Director Kathy Kraninger’s one-year anniversary on the job, but there is very little to celebrate for U.S. consumers. Her actions have rarely deviated from the path set by her predecessor, right-wing ideologue Mick Mulvaney, who considered the Bureau’s mission to protect consumers a joke. Consumer watchdog group Allied Progress offers a sobering look back at Kraninger’s tenure that has thus far systematically prioritized industry demands above stopping consumer harm. Read Kraninger’s failing report card HERE.
One of Kraninger’s first major actions as Director was to mark for death perhaps the strongest consumer safeguard against the payday loan debt trap – the ability-to-repay standard – which she admitted would enrich the payday industry by $7 billion every year. And just this week it was reported she may be poised to roll back even more protections from predatory lenders. Kraninger has advanced other proposed rules that seek to benefit industries, including debt collectors and greedy banks, at vulnerable borrowers’ expense. Kraninger is even refusing to defend the constitutionality of her own job, while the agency has largely abandoned its enforcement responsibilities against financial scammers and abusive lenders.
Kraninger made her guiding principles clear when recently she told a roomful of bankers, “You are really helping drive the agenda.” Meanwhile, she’s moved to drown out consumer voices by introducing new barriers to access the consumer complaint database. For millions of working Americans who’ve been mistreated, the nation’s top consumer advocate has offered little more than a cold shoulder – insisting consumers “help themselves, protect their own interests” — or a trite bit of advice: ‘Buyer beware.’ Consumers have truly been on their own under the Trump administration.
“Mick Mulvaney teed up a number of attacks on consumer protections on behalf of wealthy special interests, but it’s Director Kraninger who has carried them out unflinchingly, and even expanded the battlefield,” said Jeremy Funk, spokesman for Allied Progress. “Like Mulvaney, Kraninger’s preferred method of dealing with illegal behavior from big banks, predatory lenders, and other financial scammers is to pretend it doesn’t exist. She’s gone out of her way to receive industry advice and consent on her rulemaking, especially from those who have showered millions of dollars on Donald Trump’s campaign and personal businesses. And now Kraninger is streamlining her input from special interests by stacking her Consumer Advisory Board with financial industry insiders. Kraninger’s first year has been one hell of an audition for industry when she’s ready to stroll through the golden revolving door.”
Among the Many Lowlights From Kraninger’s First Year [Read the Full Report Here]:
- Conducted zero new research before releasing an industry-friendly proposal to gut payday loan borrower protections.
- Proposed a debt collection rule that will allow debt collectors to send unlimited texts and emails to consumers.
- Appointed a former mortgage banker who was called the “new face of the housing crisis” to serve on the Bureau’s Consumer Advisory Board.
- Announced she would no longer defend the constitutionality of the CFPB’s single director structure—prompting companies to cite the same argument to challenge CFPB enforcement actions in court.
- Announced industry-friendly changes to the consumer complaint database that could shield bad actors through walls of disclosures and by casting consumer stories as unreliable.
- Hired a former student loan servicing executive to be CFPB’s private education loan ombudsman – the executive’s former agency was accused of “derailing hundreds of public-sector workers from receiving student loan forgiveness.”
- Maintained a slower pace of opening new CFPB investigations, while issuing “‘friendlier’” penalties to bad actors.
- Voted to advance a proposal that would allow payday lenders to use a loophole to violate state interest rate caps.