House Financial Services Committee Hearing Highlights the Continued Partisan Divide Over the CFPB
Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger made her first appearance before the House Financial Services Committee on Thursday, March 7 at a hearing entitled, “Putting Consumers First? A Semi-Annual Review of the Consumer Financial Protection Bureau.”
Congresswoman Maxine Waters (D-CA-43), chairwoman of the Committee, convened the hearing with testimony highlighting the intentions of the CFPB as a centerpiece of the Dodd-Frank Wall Street Reform and Consumer Protection Act. She expressed her disappointment with President Trump’s Acting Chief of Staff Mick Mulvaney during his tenure as acting director of the CFPB, “I am committed to reversing the damage that Mulvaney caused, and ensuring that the Consumer Bureau can resume its important work.”
Waters pointed to her newly reintroduced bill H.R. 1500, the Consumers First Act, “which restores the agency’s supervisory and enforcement powers and provides the transparency and accountability needed for the agency to carry out its important mission.” She pledged to ensure that the CFPB is fully empowered to protect consumers.
In his testimony following Waters, Congressman Patrick McHenry (R-NC-10), ranking member of the Committee, took an opposing stance calling the Bureau, “an unacceptable agency” and argued that the CFPB practices “regulation by enforcement, a dangerous and destructive approach to supervision.”
What followed was a four-hour hearing highlighting the continuing partisan divide over CFPB enforcement. Committee Democrats generally criticized the decline of enforcement actions since Kraninger took the helm, the Bureau’s proposal to eliminate the ability to repay (ATR) provisions of its payday loan rule, and the decision to discontinue the Military Lending Act compliance examinations. In contrast, Republicans generally praised Kraninger for the work she has done during her time as director and pointed to an abuse of power by Richard Cordray, the first director of the CFPB.
Kraninger defended her position and plans for the future of the CFPB. “I am starting to think around a philosophy of focusing on the prevention of harm,” she said. “We have tremendous tools and power to drive to that end. There are certainly institutions that are also motivated to support their customers and consumers to prevent harm.”