First Day on the Job: Kraninger Backs Racist Blogger Over Consumers

Decision to Keep Eric Blankenstein Speaks Volumes About Kraninger’s Character

WASHINGTON, D.C. – Today during her first press briefing as CFPB Director, Kathy Kraninger indicated she will not dismiss Eric Blankenstein, Mick Mulvaney’s hand-picked fair lending enforcement chief who was discovered by the Washington Post in September to have a history of racist writing. Allied Progress released the following statement in response:

On her first day of the job, Kathy Kraninger sent a signal to her new colleagues that reprehensible racism is not a fireable offense. The CFPB’s work on fair lending and protecting consumers from discriminatory lending practices is irreparably tainted because of Eric Blankenstein. The fact that Kraninger doesn’t see that speaks volumes about her character,” said Karl Frisch, executive director of Allied Progress.

Allied Progress obtained a recording of Kraninger’s comments about Blankenstein which were delivered in response to a question at her first media “availability” as CFPB Director. The event was not entirely open to the press – television and electronic media were allowed in the briefing for only the first five minutes.

What Kraninger Said:

  • On Her First Day At The CFPB, Kraninger Said She’d Take Blankenstein “At Face Value” And Evaluate Where He Was At “Today.” On her first day at the CFPB, Kathy Kraninger was asked if she would remove Eric Blankenstein from the Bureau. Kraninger said, “So I knew that question would be coming, I can tell you that I have no intention of making any personnel decisions on my first day and I’d also tell you that, and I know that all of you would appreciate it too, personnel matters are inherently confidential. It’s pretty important if you’re talking about how this affects people’s lives to do that with the people who are affected, and to have that conversation at the appropriate time and place. And so that is certainly the way I will approach it, that’s the way I’ve always approached it in my career. But I do recognize that the concerns have been out there, again given its day one, what I know is what I’ve heard from the press and so I certainly will take stock of everything going forward on that. I think it’s important to, that I will take people at face value, again in where they are today and what they’re doing for the bureau. 1500 employees so I’m not going to go back and look at everything they may have ever written in their lives.” [Press Briefing, CFPB Director Kathy Kraninger, 12/11/18]

Blankenstein’s History of Racist Writing:

  • Media Expose Blankenstein’s History Of Racist Writing: According to the Washington Post and research unearthed by Allied Progress, Eric Blankenstein wrote that calling someone “n—-r” (he actually used the word) didn’t make them a racist, asked “does it matter that someone got beat up because they were black,” claimed that hate crime “hoaxes” are “three times as prevalent as actual hate crimes,” blamed a woman’s right to choose as the reason a pregnant woman was murdered, and lamented that women can “‘f— someone [they] shouldn’t have’” and use abortion to “‘get rid of the problem’” but men can’t. He also likened life-saving stem cell research to the Holocaust.

Blankenstein’s Evolving Response

  • Blankenstein Blamed Liberals Then Backed Down But Never Apologized. In his initial response to the controversy, Blankenstein went on the attack, saying in a statement issued by Mulvaney spokesman John Czwartacki, that his critics were only angry because he was “Governing While Conservative.” Then, as news of a “rebellion” and deep “dissent” within the CFPB spread, he changed his tune, blaming the issue on a youthful lapse in judgment.

Mulvaney Appointees Misled, Tried to Silence Woman Used in Blankenstein Defense:

  • Mulvaney’s Spokesman John Czwartacki Issued Blankenstein’s Defiant Response To The Revelations About His Blog. “In his initial response to the controversy, Blankenstein said in a statement issued by Mulvaney spokesman John Czwartacki, that his critics were only angry because he was ‘Governing While Conservative.'” [Stacy M. Brown, “CFPB Staff Said to Rebel Over Racist Blog Posts by Eric Blankenstein,” BlackPressUSA, 10/23/18]
  • During The Initial Reporting On The Blankenstein Matter, A Statement from CFPB Fair Lending Office Head Patrice Ficklin Was Also Issued To The Press (Supporting Blankenstein.) “Patrice Ficklin, a career official who serves as assistant director of the Fair Lending Office, said in a statement provided by the agency that she disagrees with Blankenstein on some fair-lending issues and enforcement decisions but described him as “collegial, thoughtful and meticulous.” [Robert O’Harrow Jr., Shawn Boburg and Renae Merle, “Trump anti-discrimination official once called most hate crimes hoaxes,” The Washington Post, 09/26/18]
  • However, Just Two Days After Her Initial Statement Ficklin Sent An E-Mail To Agency Employees Announcing She Was Withdrawing Her Support For Blankenstein In The Wake of His Troubling Blog Posts and Asking for A Halt in The Bureau’s Fair Lending Office Reorganization. “The Consumer Financial Protection Bureau (CFPB) official in charge of fair lending is pulling her support for a top agency aide over blog posts he wrote that dismissed hate crimes and used racial slurs. Patrice Ficklin, director of the CFPB’s fair lending office, wrote in an email to agency employees obtained by The Hill that she has asked the agency’s acting director Mick Mulvaney to halt a reorganization of her office due to the posts.” [Sylvan Lane, “Top consumer bureau official blasts colleague over blog posts dismissing racism,” The Hill, 09/28/18]
  • Ficklin Claimed She Had Not Seen Blankenstein’s Blog Posts Before She Issued Her Initial Statement On The Matter. “Ficklin said she did not have time to read the blog posts before being asked to support her colleague. ‘When Eric Blankenstein asked me to make a statement in support of him to the Washington Post, I dropped everything I was doing while on leave to honor his request,’ she said. ‘Because he asked me to send the statement to him by 12 noon if possible, I did not read his blog posts before drafting my quote.’” [Kate Berry and Rachel Witkowski, “Top CFPB official yanks support for political appointee over past writings,” American Banker, 09/28/18]
  • After Reviewing Blankenstein’s Blog Posts Ficklin Said She “No Longer Supported His Involvement In Discrimination Cases.” “Ficklin initially gave a statement supporting Blankenstein to The Post, but told CFPB employees in her email Friday that she had offered the support before reading his past writings. She said that she no longer supported his involvement in discrimination cases and raised questions about his ability to handle such matters fairly.” [Sylvan Lane, “Top consumer bureau official blasts colleague over blog posts dismissing racism,” The Hill, 09/28/18]
  • Mulvaney’s Chief of Staff Kirsten Sutton Mork, Tried To Interfere with Ficklin’s Email To CFPB Staff About Blankenstein. “Mulvaney’s chief of staff, Kirsten Sutton Mork, reportedly asked Ficklin to speak with her before sending her email, a request [Ficklin] apparently declined, according to the newspaper.” [Sylvan Lane, “Top consumer bureau official blasts colleague over blog posts dismissing racism,” The Hill, 09/28/18]

Mulvaney’s CFPB Undermining Fair Lending:

  • Mulvaney’s CFPB Reconsidered A Rule On Home Mortgages, Making Discrimination Easier In Home Lending. In December 2017, Mick Mulvaney’s CFPB announced it would “reconsider various aspects” of new Home Mortgage Disclosure data reporting requirements designed to “identify… potential discriminatory lending practices in the marketplace.” Critics cautioned this could “make it more difficult to identify discrimination in home lending.” [Kate Berry, “CFPB’s Mulvaney plots HMDA rollback, but it may not matter,” American Banker, 05/25/18; [“Home Mortgage Disclosure Act,” Federal Financial Institutions Examination Council, accessed 02/01/17; Final Rule, Home Mortgage Disclosure Act (Regulation C), Consumer Financial Protection Bureau, accessed 02/01/18; “Statement with respect to HMDA implementation,” Consumer Financial Protection Bureau, 12/21/17]
  • Mulvaney Proposed Reviewing The CFPB’s Use Of Disparate Impact Theory, Undermining CFPB Enforcement. In May 2018, Mick Mulvaney proposed that the CFPB review enforcement of fair lending law under the Equal Credit Opportunity Act. Mulvaney proposed reviewing its use of disparate impact theory in fair lending cases, which would threaten one of the CFPB’s most powerful enforcement tools. [Evan Weinberger, “CFPB to Review Use of Disparate Impact in Fair Lending Cases,” Bloomberg BNA, 05/21/18]

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