‘Consumers First Act’ Markup Comes After Two Years of Unchecked Erosion of Consumer Protections Under Trump Administration
WASHINGTON, D.C. – Today’s markup in the House Financial Services Committee of H.R. 1500, the ‘Consumers First Act’ marks a new beginning of congressional accountability for the Trump administration’s failure to protect consumers. The bill sponsored by Chairwoman Maxine Waters aims to put the Consumer Financial Protection Bureau back on track to addressing consumer complaints and recovering as much money as possible for those ripped off by big banks, predatory lenders, and other financial scammers – a mission that was abandoned under the leadership of former Acting Director Mick Mulvaney and now Director Kathy Kraninger, who agrees with everything he did.
“Under the Trump administration, the CFPB went from a fully-forced and transparent agency that was successfully recovering billions of dollars for cheated consumers, to one that is stretched-thin, shrouded in secrecy and more sympathetic to industry demands than consumer complaints,” said Jeremy Funk, spokesman for Allied Progress. “The ‘Consumer First Act’ would help restore it by undoing the blatant acts of sabotage conducted by Mick Mulvaney. When Congress was entirely under control of President Trump’s party, the administration didn’t have to answer to anybody why they stopped performing the most basic duties and functions prescribed by law to protect consumers. They never had to answer why major institutions caught defrauding consumers are getting away with chump-change fines as little as $1 – why payday lenders were allowed to help write their own rules – why they’re pretending they have no authority to check on whether our servicemembers are being overcharged by lenders – why enforcement actions plummeted 80 percent last year compared to the year before Trump was elected. The party’s over.”
WHAT YOU NEED TO KNOW:
The Consumers First Act Would Block The Trump Administration’s Efforts To Undermine Consumer Protection And The CFPB
The Consumers First Act Would Block And Reverse The Trump Administration’s Anti-Consumer Efforts To Undermine The CFPB.
H.R.1500, The Consumers First Act, Was Introduced By House Financial Services Chairwoman Maxine Waters (D-CA) In March 2019.
H.R.1500, The Consumers First Act, Was Introduced By Rep. Maxine Waters (D-CA) In March 2019. According to Congress.gov, the Consumers First Act was introduced on March 5, 2019 by House Financial Services Committee Chairwoman Maxine Waters. The legislation is cosponsored by 29 Members and has been referred to both the House Financial Services and House Education and Labor Committees. [“H.R.1500 – Consumers First Act,” U.S. House of Representatives, 03/05/19]
- Waters Is Chairwoman Of The House Financial Services Committee. [“H.R. 1500, The Consumers First Act,” House Financial Services Committee, accessed 03/25/19]
The Legislation Seeks To Block The Trump Administration’s Anti-Consumer Efforts To Undermine The CFPB.
The Consumers First Act “Seeks To Block The Trump Administration’s Anti-Consumer Agenda” And Reverse Its Efforts “To Undermine The Mission Of The” CFPB. “The bill seeks to block the Trump Administration’s anti-consumer agenda and reverse their past efforts, led by Mick Mulvaney, to undermine the mission of the Consumer Financial Protection Bureau (Consumer Bureau).” [“H.R. 1500, The Consumers First Act,” House Financial Services Committee, accessed 03/25/19]
The Trump Administration Has Worked To Undermine The CFPB By “Muzzling” The Bureau, “Relaxing Supervision And Enforcement,” And “Reducing Transparency And Accountability.” House Financial Services Committee Democrats found that the “the Trump Administration has worked hard to undermine the Consumer Financial Protection Bureau,” by “muzzling the federal consumer watchdog,” “relaxing supervision and enforcement,” and “reducing transparency and accountability.” [“H.R. 1500, The Consumers First Act,” House Financial Services Committee, accessed 03/25/19]
Under Kathy Kraninger, The CFPB Is Undermining Its Own Mission By Catering To Industry Interests Instead Of Protecting Consumers.
Kathy Kraninger Has Sided With The Payday Lending Industry And Proposed Gutting Protections For Borrowers Against Predatory Lending Practices.
Kathy Kraninger’s First Major Policy Proposal At The CFPB Was To Weaken Protections For Borrowers Who Can’t Afford To Pay Back Their Payday Loans—And Pad The Pockets Of Payday Lenders With Over $7 Billion.
In February 2019, Kathy Kraninger Proposed Gutting The CFPB’s Payday Lending Rule And Eliminating Its Crucial Ability-To-Repay Provision, Which Requires Lenders To Verify That Borrowers Can Repay Their Loans. “Payday lenders won a major victory on Wednesday after the Consumer Financial Protection Bureau moved to gut tougher restrictions that were to take effect later this year. The industry has spent years trying to fend off the new rules, which were conceived during the Obama administration. The regulations were intended to prevent spiraling debt obligations by limiting the number of consecutive loans that could be made and requiring lenders to verify that borrowers could pay back their loans on time while still covering basic living expenses. In her first major policy move, the bureau’s new director, Kathleen Kraninger, proposed eliminating nearly all of the regulation’s substantive requirements, including the ‘ability to repay’ mandate. There was ‘insufficient evidence and legal support’ for the provision, the bureau said. It also sought to drop a limit that would have prevented lenders from making more than three short-term loans without a 30-day ‘cooling off’ period.” [Stacy Cowley, “Consumer Protection Bureau Cripples New Rules for Payday Loans,” The New York Times, 02/06/19]
The Payday Lending Industry Will Make An Estimated $7.3 To $7.7 Billion Dollars From Kraninger’s Proposed Rollback Of The Payday Rule. “VAN HOLLEN: Thank you. I’m looking at your analysis here now. Are you familiar with the Dodd-Frank Act Section 1022-b3 analysis that accompanied the notices? KRANINGER: Yes, Senator. VAN HOLLEN: And, are you familiar with the fact that you found that the payday lending industry, on an annualized basis, would save about $7.3 to $7.7 billion that they would not otherwise have under the previous rule? KRANINGER: Senator again there were a number of things that were looked at including – VAN HOLLEN: I’m just asking you about this provision which is right here in the documents you submitted. Does it conclude that by rescinding the rule on an annualized basis payday lenders will be able to pocket $7.3 to $7.7 billion dollars more? Isn’t that what it says right here? KRANINGER: Yes, Senator it does.” [Press Release, Sen. Chris Van Hollen, 03/12/19]
Kathy Kraninger Has Neglected The CFPB’s Duty To Supervise Lenders’ Compliance With The Military Lending Act.
Kathy Kraninger Has Failed To Resume Supervisory Examinations Of Financial Institutions For Compliance With The Military Lending Act After They Were Halted By Her Predecessor Mick Mulvaney.
Under Kathy Kraninger, The CFPB Has Failed To Resume “Examinations Of Financial Firms For Compliance With The Military Lending Act” After Mick Mulvaney Halted Them.“In addition, several senators sharply criticized Kraninger over the CFPB’s decision to halt examinations of financial firms for compliance with the Military Lending Act. Kraninger has yet to resume the exams after taking over for Mulvaney, who halted them. The Obama administration had conducted supervisory exams for years, and long cited its authority not just under the Dodd-Frank Act, but also in regulating ‘unfair, deceptive or abusive acts or practices,’ known as UDAAP. In January, Kraninger sided with Mulvaney and specifically asked Congress to give the CFPB ‘clear authority’ to conduct supervisory exams for MLA compliance. [Kate Berry, “CFPB’s Kraninger grilled over payday, military lending,” American Banker, 03/12/19]
Kraninger Claims There Isn’t “Clear Authority” For The CFPB To Supervise Lenders’ Compliance With The Military Lending Act (MLA)…
In January 2019, Kathy Kraninger Asked Congress To Give The CFPB “Clear Authority” To Conduct Supervisory Examinations Of Banks And Lenders For Compliance With The Military Lending Act. “The director of the Consumer Financial Protection Bureau on Thursday asked Congress to give it the ‘clear authority’ to conduct supervisory exams of banks and financial firms for compliance with the Military Lending Act. The director, Kathy Kraninger, sent a letter to Vice President Mike Pence and House Speaker Nancy Pelosi with draft legislation that would give the bureau ‘nonexclusive authority to require reports and conduct examinations on a periodic basis.’ ‘The requested authority would complement the work the Bureau currently does to enforce the MLA,’ Kraninger said in the one-page letter.” [Kate Berry, “CFPB’s Kraninger asks for ‘clear authority’ over military lending exams,” American Banker, 01/17/19]
…Even Though Legal Experts And Thirty State Attorneys General Agree That The CFPB Has Supervisory Authority For Compliance With The MLA.
In October 2018, “Thirty State Attorneys General,” Plus “The AGs Of The District Of Columbia, Puerto Rico, And The Virgin Islands,” Expressed Concern About Reports That The CFPB Would “‘No Longer Ensure That Lenders Are Complying With The Military Lending Act (MLA) As Part Of Its Regular, Statutorily Mandated Supervisory Examinations.’” “Thirty state attorneys general, joined by the AGs of the District of Columbia, Puerto Rico, and the Virgin Islands, have sent a letter to CFPB Acting Director Mulvaney ‘to express our concern about recent reports that the [Bureau] will no longer ensure that lenders are complying with the Military Lending Act (MLA) as part of its regular, statutorily mandated supervisory examinations.’ Such recent reports included one from the New York Times published in August 2018 indicating that Mr. Mulvaney was planning to eliminate routine supervisory examinations of creditors for MLA violations because the CFPB lacks statutory authority to conduct such examinations.” [John L. Culhane, Jr., “State AGs criticize CFPB plans to end MLA exams,” Ballard Spahr LLP, 10/24/18]
- The AGs Asserted That, By Restricting Supervisory Examinations, The CFPB Is Failing Its Statutorily Mandated Duty To Enforce The MLA. “In addition to describing the benefits that the MLA provides to servicemembers, the AGs assert that the Bureau ‘would be failing to abide by its statutorily mandated duty to enforce the MLA by restrictively interpreting its examination authority to preclude lenders’ compliance with the MLA.’ […] The AGs argue that this language allows the CFPB to examine for MLA compliance because ‘Congress has explicitly provided [in the Consumer Financial Protection Act (CFPA)] that one ‘applicable authority’ available to the CFPB is examination of lenders in order to “detect[] and assess[] risks to consumers and to markets for consumer financial products and services.”’” [John L. Culhane, Jr., “State AGs criticize CFPB plans to end MLA exams,” Ballard Spahr LLP, 10/24/18]
Kathy Kraninger Has Turned A Blind Eye To The Student Loan Crisis At The CFPB.
Kathy Kraninger Refused To Acknowledge That There Is A Student Debt Crisis In America…
When Questioned By Rep. Ayanna Pressley (D-MA), Kathy Kraninger Refused To Acknowledge There Is A Student Debt Crisis In America.Rep. Pressley:Yes or no. Would you agree that we have a student debt crisis in our country? Kathy Kraninger:Certainly growing student debt is a concern that we absolutely need to look at and ensure that people… Rep. Pressley:Yes or no, would you agree that we have student debt crisis in this country? Kathy Kraninger:That word is a very loaded word and for that reason… Rep. Pressley:I’ll take that as a no. [“Putting Consumers First? A Semi-Annual Review of the Consumer Financial Protection Bureau,” House Financial Services Committee, 03/07/19 (3:59:46)]
…And Has Not Filed A Single Lawsuit Against A Student Loan Company Since Taking Over The CFPB.
Under Kathy Kraninger’s Leadership, The CFPB Has Not Filed A Single Lawsuit Against A Student Loan Company. Warren:Director Kraninger, in the past year and a half how many lawsuits has the CFPB filed against student loan companies?Kraninger: I don’t know the specific answer to that question… Sen. Warren:Well I can tell you ‘cause it’s a matter of public record.Kraninger:Yes we do have active litigation… Sen Warren:How many have you filed? Kraninger:There are two active cases in this area. Sen. Warren:Gee, what the public record seems to show is zero. Right, not one single action against lenders and servicers who’ve scammed students. Not one dollar returned to students who get cheated. In contrast, when he led the CFPB, Richard Cordray filed 15 cases and he recovered $712 million for those students who had been cheated. [“Senator Warren Questions CFPB Director Kraninger About Lack of Enforcement Action,” Senator Elizabeth Warren via YouTube, 03/12/19 (1:19)]
Under Former Director Richard Cordray, The CFPB Filed “50 Cases Filed Against Student Loan Companies” And Returned $712 Million To Consumers. “That compares with 50 cases filed against student loan companies, which led to the recovery of $712 million for consumers under former CFPB Director Richard Cordray, an Obama appointee, Warren noted.” [Kate Berry, “CFPB’s Kraninger grilled over payday, military lending,” American Banker, 03/12/19]
The CFPB Has Sharply Decreased Enforcement Actions And Returns Only $925,000 Per Week To Harmed Consumers—Only A Fraction Of The $43 Million Returned Weekly To Consumers By The CFPB Under Richard Cordray.
CFPB Enforcement Actions Decreased 80% In 2018 From Peak Levels In 2015—And Have Remained Low Under Kathy Kraninger’s Leadership.
The CFPB Announced 80% Fewer Enforcement Actions In 2018, While Mulvaney Led The CFPB, Than It Did In 2015, When Richard Cordray Was Leading The Bureau. “The number of public enforcement cases announced in 2018 declined by 80% from the Bureau’s peak productivity in 2015. In 2015, the CFPB announced 55 public law enforcement actions. In 2018, this number had declined to 11.” [Christopher L. Peterson, “Dormant: The Consumer Financial Protection Bureau’s Law Enforcement Program in Decline,” Consumer Federation of America, 03/12/19]
Under Kathy Kraninger’s Leadership, “Law Enforcement Activity Continues To Remain Significantly Below Earlier Levels Since Her Confirmation.”“Overall, enforcement activity and relief to the consumer has declined since the appointmentof Mick Mulvaney in 2017. And, despite being touted as one of Director Kraninger’s initialpriorities for her term of leadership, law enforcement activity continues to remain significantlybelow earlier levels since her confirmation.” [Christopher L. Peterson, “Dormant: The Consumer Financial Protection Bureau’s Law Enforcement Program in Decline,” Consumer Federation of America, 03/12/19]
Under Kathy Kraninger, The CFPB Returns $925,000 A Week To Consumers – Compared To $43 Million A Week Under Richard Cordray.
Under Richard Cordray, The CFPB “Returned About $43 Million In Restitution To Consumers Every Single Week,” While The CFPB Under Kraninger “Is Now Down To About $925,000.” “It says the bureau returned about $43 million in restitution to consumers every single week when Richard Cordray, an Obama appointee, was in charge. Under Mulvaney that figure dropped to $6.4 million a week, and under Kraninger is now down to about $925,000.” [David Lazarus, “While campaigning, Trump said he’d be a consumer champion. Guess what’s happened,”The Los Angeles Times, 03/15/19]
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