CFPB Director Kraninger Appears Before House Financial Services Committee
Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger recently appeared before the House Financial Services Committee (HFSC), testifying at a hearing entitled “Protecting Consumers or Allowing Consumer Abuse? A Semi-Annual Review of the Consumer Financial Protection Bureau.” Under the 2010 Dodd-Frank Act, which created the CFPB, the Bureau’s Director is required to testify before the Committee at semi-annual hearings.
In her prepared statement, Kraninger reviewed some of the consumer protection-related actions that the CFPB has taken thus far under her directorship.
“We prevent harm by building a culture of compliance throughout the financial system while supporting free and competitive markets that provide for informed consumer choice,” Kraninger said. Other highlights she noted were better resolutions for students, clarity in rulemaking, and using enforcement and supervision to promote compliance with the law.
In a preview of the Bureau’s future activities, Kraninger said that “moving forward, the Bureau intends to cite or challenge abusive conduct when the harm to consumers exceeds the benefits.”
“When alleging abusiveness violations, we intend to clearly demonstrate the nexus between cited facts and our legal analysis in a way that supports development of the metes and bounds of abusive acts and practices as distinguished from unfair or deceptive acts and practices,” she added. “Further, we intend to seek certain types of monetary relief only when the entity has failed to make a good-faith effort at compliance. Restitution for consumers will be the priority in such cases.”
Congresswoman Maxine Waters (D-Calif.), Chairwoman of the Committee, used her opening statement to express concerns about the CFPB’s actions under Kraninger’s leadership. Waters claimed that the agency has been lenient towards abusive debt collection practices and payday loans, as well as negligent towards the constitutionality of its structure.
“Congress created the Consumer Bureau as a stalwart watchdog to protect consumers from the types of harmful and abusive practices that caused the 2008 financial crisis and led to economic catastrophe,” Waters said. “America needs a strong Consumer Bureau that is vigilant and effective.”
During her remarks, Congresswoman Waters also reiterated that the Committee will maintain oversight of the CFPB to ensure that their agenda is to protect consumers from financial abuse.
