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Congresswoman Joyce Beatty

Representing the 3rd District of Ohio

House Democrats Target CFPB politics, other Mulvaney changes in new bill

Mar 6, 2019
News Articles

WASHINGTON — A day before Consumer Financial Protection Bureau Director Kathy Kraninger is set to testify to the House Financial Services Committee, House Democrats introduced legislation to undo efforts to weaken the agency by her predecessor, former acting Director Mick Mulvaney.

Nearly 30 Democrats on the panel are co-sponsoring the Consumers First Act, which would limit the number of political appointees the CFPB can hire, restore supervision and enforcement authority in the agency’s fair-lending office, and resume supervision for the Military Lending Act, among other things.

In a Wednesday press conference, Democrats sharply criticized Mulvaney’s actions.

“The bill reverses the harmful structural changes Mulvaney and his deputies made to damage the agency one by one,” said House Financial Services Committee Chairwoman Maxine Waters, D-Calif.

The legislation comes after Mulvaney hired roughly a dozen political appointees to lead the CFPB’s offices, attempted to change the agency’s initials to BCFP and dropped several lawsuits against payday lenders, among other steps.

“Under Trump’s CFPB director Mulvaney, the CFPB has reduced transparency and accountability, weakened enforcement … and became more interested in helping payday lenders who allegedly misled consumers and charged exorbitantly high interest rates, rather than protecting the American consumers they were sworn to serve,” said Rep. Joyce Beatty, D-Ohio, who chairs the new diversity and inclusion subcommittee. “I bet the 30 million defrauded consumers and their families who received help from the CFPB sure didn’t think it was a partisan issue.”

Beatty added that the legislation is aimed “to make sure no matter who is running the Consumer Financial Protection Bureau, there are protections that guard against the rogue director from dismantling the CFPB from the inside and out.”

Under Kraninger’s leadership, the agency recently proposed to abandon tough new underwriting requirements for the agency’s payday lending rule that was introduced under the leadership of the Obama-appointed director Richard Cordray.

The legislation would codify the CFPB’s name and restore the Office of Students and Young Consumers. It also requires transparency on interagency cooperation, mandates that the CFPB’s complaint database remain publicly accessible and reinstates the Consumer Advisory Board members who were removed by Mulvaney.

Waters’ bill comes as Kraninger is set to testify to the full Financial Services Committee on Thursday, the first time she will testify in front of the House since Democrats took control.

Waters said Wednesday that she has not yet had an “in depth” conversation with Kraninger, but simply had a “meet and greet” when she was sworn in as the new director. She said Kraninger “knows about the bill.”

The legislation currently has no Republican co-sponsors, but Waters suggested she isn't open to compromise on the bill.

“I do not have any consideration for compromise on how that bureau is run," she said.

This article was originally published by American Banker on March 6, 2019