Kathy Kraninger Claims Evidence Guides Her Rulemaking … Just Not For Payday Loans

Washington D.C. (June 11th, 2019) –– In CFPB Director Kraninger’s first television interview since taking the post 6 months ago, she laid it on thick about how much evidence and data informs her rulemaking decisions. A curious thing to say on the heels of Kraninger’s final rule delaying protections from the payday loan debt trap that the agency admitted was not based on not a single new piece of data or research. How can consumers trust that her new proposal to open the floodgates of debt collector harassment over phone, text and email will not be treated the same,  i.e. the only data actually considered is the industry’s profit margin.

BACKGROUND: 

Kathy Kraninger Claims The CFPB Wants To Use “Evidence And Data” To Make The Best Possible Decisions, But Her Staff Admits “No New Research” Went Into Their Payday Rule Rewrite

During Her June 2019 Appearance On Bloomberg TV, Kathy Kraninger Said The CFPB Wants To “Make Sure We Get Evidence And Data To Make The Best Possible Decisions.”

Kathy Kraninger Claimed That The CFPB Is Making Sure They “Get Evidence And Data To Make The Best Possible Decisions” In The Debt Collection Rulemaking Process. “A great example is our debt collection rule […] We are really engaged in the process throughout from the beginning to solicit comments, to make sure we get evidence and data to make the best possible decisions, and we’re engaged in even some additional research on disclosures that are going to work to help consumers.” [“Kraninger Says She Hasn’t Weakened the CFPB,” Bloomberg, 06/10/19 01:29]

But Just Last Month, CFPB Policy Associate Director Thomas Pahl Told Congress The Bureau “Did Not Do Any New Research” While Revising The Payday Rule.

CFPB Policy Associate Director Thomas Pahl Told House Financial Services Subcommittee Members That “‘We Did Not Do Any New Research’” For Its Overhaul Of The Payday Lending Rule. “Thomas Pahl, the CFPB’s policy associate director for research, markets and regulations, defended the agency’s overhaul of its 2017 payday rule, announced earlier this year, by claiming the study the CFPB relied upon to impose tough ability-to-repay standards did not address vehicle title loans and was limited to data collected from one payday lender in five states. ‘We did not do any new research,’ Pahl told the House Financial Services subcommittee on economic and consumer policy. ‘We have decided to reconsider the rule, in part, because the research that was done — [there was] nothing wrong with it in and of itself — is not a very strong basis for addressing all vehicle title lenders nationwide and all payday lenders nationwide and for that reason we have questions about it, and that’s why we put it out for public comment to see if there are other sources of information on this point before the bureau makes a final determination.’” [Kate Berry, “Democrats grill CFPB official on payday rewrite,” American Banker, 05/16/19]

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