Kraninger Appears Before House Financial Services and Senate Banking Committees
Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger appeared before both chambers of Congress last week in a pair of hearings on the CFPB’s Semi-Annual Report to Congress. The appearance comes shortly after the Bureau finalized its rule removing the Small Dollar Loan rule’s underwriting requirements. The Bureau’s decision was met with Democratic criticism at both hearings, but Kraninger and Republicans defended the rule, asserting that it will improve consumer access to credit.
“We have worked to expand our reach to consumers to provide them with actionable, useful information about their rights, options, and expectations in the marketplace for consumer financial products and services,” Kraninger said in her oral testimony.
The Director contended that the new rule is meant to promote competition and allow banks to offer small-dollar lending products. “Enabling consumers to understand the products that are available to them is a huge part of where we are today,” she continued.
In Senator Mike Crapo’s (R-Idaho) statement, he commended the CFPB’s steps to protect consumers, especially after the Supreme Court ruling in July that deemed the single director’s removal for cause only as unconstitutional.
“Updating this rule is an important step toward ensuring the availability of credit that is essential to so many consumers who struggle to access or qualify for other options,” he stated. “The changes made by the 2020 Small Dollar Loan final rule carefully balances ensuring the widespread availability of credit to all Americans while preserving strong protection for all consumers.” Crapo serves as the Chairman of the Senate Committee on Banking, Housing, and Urban Affairs.
Appearing the next day before the House Financial Services Committee (HSFC), Chairwoman Maxine Waters (D-Calif.) gave a statement alleging that the Bureau is not focused on American consumers’ best interests. She said that Kraninger “has focused the Consumer Bureau on weakening critical consumer protections, relaxing enforcement against financial institutions, and undermining the agency from the inside.”
“We know that consumers are reporting major hardships with payday lenders, mortgage servicers, credit card companies, and the credit reporting bureaus,” Waters said.
Ranking HFSC member Patrick McHenry (R-N.C.) applauded the CFPB’s efforts since the Supreme Court ruling. “We now have a real opportunity to work together to bring necessary statutory reforms,” he said. “Reforms that will benefit consumers and bring clear guidance to industry so that they may better serve their customers.”
Senator Sherrod Brown (D-Ohio), ranking member of the Senate Committee on Banking, Housing, and Urban Affairs, denounced the Bureau’s efforts in his statement, declaring that Kraninger exploited the COVID-19 pandemic to diminish protections for American families, while strengthening protections for corporations.
“We have one system for corporations and the wealthy and the well-connected, one where you get away with just about anything ⎯ and a different one for everyone else, where your ‘good faith’ effort never seems to be enough,” Brown said.