Eight Simple Questions CFPB Nominee Kathy Kraninger Has Yet to Answer

Mulvaney’s Lackey Has Not Been Forthcoming with Senators or the Public  

WASHINGTON, D.C. – Later this week, Kathy Kraninger’s nomination to lead the Consumer Financial Protection Bureau (CFPB) will come to the full lame-duck Senate for a confirmation vote despite her lack of consumer protection experience and her unwillingness to provide answers to important questions or documents that could shed light on her record.

During her Senate Banking Committee confirmation hearing in August, Kraninger refused to answer basic questions about her current duties at the Office of Management and Budget (OMB) and the role she played in the Trump administration’s family separation immigration policy or its disastrous response to Hurricane Maria in Puerto Rico.

In addition to her failure to answer important questions or produce relevant documents, Kraninger has been unclear about what she will do as CFPB director other than continuing Mick Mulvaney’s legacy of undermining consumer protections.

Kathy Kraninger has no record of consumer protection or holding big banks, predatory lenders, and other financial scammers accountable.  She has repeatedly refused to answer even the most basic questions about her record.  She has repeatedly refused to offer her views on pressing consumer financial issues. She has repeatedly refused to release documents that could shed light on her work in the Trump administration. The mission of the CFPB is far too important to be put in the hands of someone who lacks candor and experience at such a fundamental level,” said Karl Frisch, executive director of Allied Progress.

He continued, “Why are Republican Senators prioritizing Kathy Kraninger’s confirmation during this lame-duck session of Congress when there are still so many unanswered questions about her qualifications and record? Political payback, plain and simple. These Senators have taken millions in campaign cash from the very industries regulated by the CFPB and they trust Kraninger’s commitment to continue Mick Mulvaney’s anti-consumer agenda. More than anything, they do not want someone leading the CFPB who will aggressively protect the interests of consumers from the likes of Wells Fargo, Equifax, payday lenders, and other financial bad actors.”

Here are eight simple questions Kraninger still has not answered as the Republican Senate prepares to vote on Kraninger’s nomination in this lame-duck session:

QUESTION 1: What was Kraninger’s involvement with the Trump Administration’s family separation immigration policy?

What We Know: 

  • Kraninger’s Fingerprints Are Likely All Over The Trump Administration’s Family Separation Policy.  Kraninger was likely involved in implementing the Trump Administration’s policy of separating children from their parents at the border. This involvement would have been in her official capacity at OMB. Kraninger has budgetary oversight of the Department of Homeland Security and Department of Justice, and OMB has oversight of the policy change that prompted families to be separated at the border. [Kate Berry, “CFPB nominee likely connected to Trump’s ‘zero-tolerance’ immigration policy,American Banker, 06/19/18] 
  • During Kraninger’s Confirmation Hearing, When Asked By Sen. Elizabeth Warren (D-MA) Whether She Had A Role In Implementing Trump’s Family Separation Immigration Policy, Kraninger Refused To Answer. Kraninger said she didn’t “‘want to characterize the advice’” she gave to the Administration. [Nomination Hearing, Senate Banking, Housing, and Urban Affairs Committee, 07/19/18]

QUESTION 2: What was discussed at Kraninger’s February 2018 meeting with a leader from one of the largest operators of private ICE detention facilities in the country?

What We Know 

  • Eleven Senators Recently Pressed GEO Group To Respond To A Report That Some “Immigrant Detention Facilities Had Spoiled And Moldy Food,” Lacked Hygienic Facilities, And A Hosted Litany Of Other Problems. The Senators “pressed [the] private contractors… for details on whether they are meeting federal detention standards… [and] … pointed to Department of Homeland Security Office of Inspector General reviews that they said found “immigrant detention facilities had spoiled and moldy food, that detainees did not have access to hot water, some showers lacked cold water, detainees had limited access to prompt and adequate medical care and that detainees were not promptly given (or not given at all) basic hygiene products such as toilet paper and toothpaste.” [Shannon Young, “Elizabeth Warren, Ed Markey question whether private immigration detention contractors meet federal standards,” Massachusetts Live, 11/16/18]

QUESTION 3: What was Kraninger’s role in the administration’s response efforts for Hurricane Maria and the subsequent crisis in Puerto Rico?

What We Know

  • Although Puerto Rican Officials Assert That They Have “Restored Power To 98 Percent Of The Grid’s Customers,” Service Can Be “Nightmarishly Unreliable” And Still Dependent On “Private Generators.” A May 2018 report in the New York times found that, “while officials say the $2.5 billion reconstruction effort has restored power to 98 percent of the grid’s customers, swaths of hilly country across the island are still pitch black after dark, punctuated by lights run on private generators. […] Even restored sections of the grid are nightmarishly unreliable, as evidenced by last month’s outage, the second major power failure in a week and the fourth since early February.” [James Glanz and Frances Robles, “How Storms, Missteps and an Ailing Grid Left Puerto Rico in the Dark,”The New York Times, 05/06/18]
  • During Kraninger’s Confirmation Hearing, When Asked About Hurricane Maria By Sen. Bob Menendez (D-NJ), Kraninger Wouldn’t Address Her Role In Providing Disaster Funds As Part Of The Response In Puerto Rico. When asked about the matter, Kraninger responded that she didn’t “‘think it was appropriate to characterize…advice’” she gave to the administration. [Nomination Hearing, Senate Banking, Housing, and Urban Affairs Committee, 07/19/18]

QUESTION 4: Does Kraninger agree with Mulvaney’s request for zero funding for the CFPB?

What We Know

  • On January 18, 2018, Mulvaney Sent His First Request To The Federal Reserve For CFPB Funding And Requested Zero Dollars. Mulvaney said the bureau would instead use funds from the CFPB’s “‘reserve fund,’” maintained by Director Cordray “in case of overruns or emergencies.” [Michael Grunwald, “Mulvaney requests no funding for Consumer Financial Protection Bureau,”Politico, 01/18/18]

QUESTION 5: How would Kraninger run the CFPB differently than Mulvaney? 

What We Know 

  • The White House, Mulvaney, Mitch McConnell And Jeb Hensarling Have All Praised Kathleen Kraninger Because She Will Allegedly Continue The Work Of “Acting Director” Mulvaney.
    • The White House said, “‘As a staunch supporter of free enterprise, she will continue the reforms of the Bureau initiated by Acting Director Mick Mulvaney.’”
    • “Acting Director” Mulvaney said, “‘I know that my efforts to rein in the bureaucracy at the Bureau of Consumer Financial Protection to make it more accountable, effective, and efficient will be continued under her able stewardship.’”
    • Senate Majority Leader Mitch McConnell said, “‘Ms. Kraninger’s resume and reputation suggest she’s well-suited to continue on the course Acting Director Mulvaney has charted toward transparency, accountability, and effectiveness within proper limits.’”
    • Jeb Hensarling, Chairman of the House Financial Services Committee, said, “‘We have seen some of that good under the leadership of Acting Director Mulvaney, and I have no doubt that will continue under the leadership of Kathy Kraninger.’”
    • [“President Trump to tap Mulvaney associate to lead Consumer Bureau,”National Public Radio, 06/16/18; Press Release, Consumer Financial Protection Bureau, 06/19/18; Press Release, Office of Senate Majority Leader Mitch McConnell, 06/20/18; and Press Release, House Financial Services Committee, 06/18/18]
  • Kraninger Agrees With All Of Mulvaney‘s Actions As Acting CFPB Director. In responses to questions for the record, Kraninger could not identify any actions taken by Acting CFPB Director Mulvaney that she disagrees with. [“Questions for Ms. Kathleen Laura Kraninger, Director-Designate, Bureau of Consumer Financial Protection, on behalf of Ranking Member Brown, and Senator Elizabeth Warren:,” US Senate Committee on Banking, Housing, and Urban Affairs, 07/19/18]

QUESTION 6: Does Kraninger agree with the bureau’s decision to drop lawsuits against or investigations into payday lenders and other industries that have donated to Mulvaney?

What We Know 

  • Mulvaney’s CFPB Closed An Investigation Into World Acceptance Corporation, A Payday Lender That Gave Him Thousands In Campaign Cash. Under Mulvaney’s leadership, the CFPB completed an investigation into World Acceptance Corporation “without an enforcement action.” The CFPB had opened an investigation into World Acceptance Corporation under Richard Cordray’s leadership. “World Acceptance, one of the nation’s biggest payday lenders, is based in South Carolina and gave Mulvaney thousands of dollars in campaign contributions while he represented the state in Congress.” [“Former payday lender CEO now wants to run the CFPB,” Associated Press, 03/06/18]
  • Under Mulvaney’s Leadership, The CFPB “Dropped A Lawsuit Against An Alleged Online Loan Shark Called Golden Valley Lending.” The case, which “took CFPB staffers years to build,” accused the lenders of illegally charging “people up to 950 percent interest rates.” One CFPB attorney who worked on the case called Golden Valley Lending “‘one of the worst of the worst’” for its predatory lending practices. [Chris Arnold, “Trump Administration Plans To Defang Consumer Protection Watchdog,” NPR, 02/12/08; Stacey Cowley, “Consumer Watchdog’s Latest Budget Request: $0,” The New York Times, 01/18/18.] 
  • Mulvaney’s Spokesperson Claimed That The Decision To Drop The Golden Valley Lawsuit Was Made By “Professional Career Staff,” And Not Mulvaney Himself. He was later forced to admit Mulvaney was involved. However, several CFPB staffers, who spoke on condition of anonymity, said that “Mulvaney decided to drop the lawsuit even though the entire career enforcement staff wanted to press ahead with it.” Mulvaney’s spokesperson finally admitted “that Mulvaney was indeed involved in the decision to drop the lawsuit.” [Chris Arnold, “Trump Administration Plans To Defang Consumer Protection Watchdog,” NPR, 02/12/08.]

QUESTION 7:  Does Kraninger agree with the bureau’s decision to strip the Office of Fair Lending and Equal Opportunity of enforcement powers? What will Kraninger do about Mulvaney fair lending enforcement chief Eric Blankenstein’s history of racist writing?

What We Know

  • Mulvaney Stripped The CFPB Office Of Fair Lending And Equal Opportunity Of Enforcement Powers. In February 2018, Mulvaney and the Trump administration “stripped enforcement powers” from the CFPB’s Office of Fair Lending and Equal Opportunity. The office was “responsible for pursuing discrimination cases.” Consumer advocates argued that “separating the fair-lending office from its enforcement power weakens its power to pursue cases.”[Renae Merle, “Trump administration strips consumer watchdog office of enforcement powers in lending discrimination cases,” The Washington Post, 02/01/18] 
  • Mulvaney Now Has More Control Over The Office Of Fair Lending And Equal Opportunity. The Office of Fair Lending and Equal Opportunity is “being moved to a position within the CFPB where it will lack authority to supervise loan makers and enforce fair lending laws.” It “will now be more directly under Mulvaney’s supervision, as part of the Office of Equal Opportunity and Fairness.” [Hannah Levintova, “The Trump Administration Just Made it Easier for Banks to Screw Over Minority Borrowers,” Mother Jones, 02/02/18]
  • In September, Media Reported That Mulvaney Fair Lending Enforcement Chief Eric Blankenstein Wrote Racist Blog Posts. “In a statement, Blankenstein acknowledged that he had written the posts but said they have no bearing on his work today. ‘The insight to be gained about how I perform my job today – by reading snippets of 14-year-old blog posts that have nothing to do with consumer protection law — is exactly zero,’ he said. ‘Any attempt to do so is a naked exercise in bad faith, and represents another nail in the coffin of civil discourse and the ability to reasonably disagree over questions of law and policy,” he said. ‘The need to dig up statements I wrote as a 25-year-old shows that in the eyes of my critics I am not guilty of a legal infraction or neglect of my duties, but rather just governing while conservative.’” [Robert O’Harrow, Shawn Boburg, and Renae Merle, “Trump anti-discrimination official once called most hate crimes hoaxes,”The Washington Post, 09/26/18]
  • Anthony M. Reardon, National President Of The National Treasury Employees Union, Sent A Letter To CFPB Director Mulvaney Urging The Agency To Take “Swift And Decisive Action” In Dealing With Eric Blankenstein’s Racist Blog Posts. “The union representing employees at the Consumer Financial Protection Bureau on Tuesday called on the agency to take ‘swift and decisive action’ in dealing with a political appointee at the agency whose incendiary writings posted 14 years have sparked an uproar throughout the bureau.'” [Kate Berry, “CFPB official’s writings make him ‘unfit’ for job, agency union says,”American Banker, 10/02/18]

QUESTION 8: Does Kraninger believe that the CFPB’s structure is constitutional? Will she protect it in court? 

What We Know 

  • In January 2018, The DC Circuit Court Of Appeals Upheld The Constitutionality Of The CFPB, As Currently Structured. “A federal appeals court has upheld the constitutionality of the Consumer Financial Protection Bureau’s structure, a decision that preserves the agency’s independence in the face of challenges from business interests and conservatives. The D.C. Circuit Court of Appeals ruled 7-3…that a provision in the 2010 Dodd-Frank law that limits the president’s ability to remove the CFPB director during his or her five-year term does not violate the president’s authority to appoint and remove executive branch officers.” [Colin Wilhelm and Josh Gerstein, “Court upholds constitutionality of Consumer Financial Protection Bureau,Politico, 01/31/18] 
  • During A 2018 Senate Banking Committee Hearing, Mulvaney Said Of The CFPB, “I Am Assuming It’s Constitutional Every Single Day When I Go In…”When asked about whether he considered the CFPB Constitutional, Mulvaney said, “‘I’m not sure that I have the discretion to consider this agency to be unconstitutional… I think the system starts to break down if people who work at places make their own conclusions about constitutionality.  If the President tells me it is unconstitutional, I’ll pay attention.  I am assuming it’s constitutional every single day when I go in…’” [Lindsay C. Demaree, “Senate Banking Committee Probes Mulvaney’s Leadership at the CFPB,” Consumer Finance Monitor, 04/13/18]

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