Kraninger-led CFPB Finds Middle Ground in Enforcement
The Consumer Financial Protection Bureau (CFPB) under the leadership of Kathy Kraninger has found a middle-ground in policing the financial services sector, initiating more enforcement actions than her predecessor Mick Mulvaney but less than Obama-appointed Richard Cordray.
Unlike other federal regulators like the Federal Trade Commission and the Federal Reserve, the CFPB is led by a single director, who has unilateral and independent authority over the actions taken by the federal agency. The CFPB has been led by three directors: Richard Cordray from January 2012 to November 2017, Mick Mulvaney from November 2017 to December 2018, and Kathy Kraninger from December 2018 to present.
According to the Wall Street Journal, the number of cases filed by the CFPB dropped significantly when Mulvaney replaced Cordray near the tail-end of 2017. The CFPB filed about 40 cases per year between Fiscal Year (FY) 2015 and FY2017. In FY2018, the CFPB, mostly under the leadership of Mulvaney, filed only 12 cases.
Some speculated that Kraninger, also being a Trump-appointed regulator, would continue the trend. Under her leadership, however, the CFPB has filed 22 cases in FY2019, nearly doubling Mulvaney. “I’d say she is a bit of a surprise,” said Alan Kaplinsky, a financial services expert at Ballard Spahr LLP. “We are handling more enforcement actions involving the CFPB than we ever have.” Still, the CFPB has been “more reasonable and friendlier [in comparison to Cordray]” during proceedings, despite the high volume of enforcement actions.
In addition to cases filed, the Kraninger-led CFPB has also wrapped up many longstanding enforcement cases, leading to the most money for consumers since FY2015. Over the past year, companies have agreed to pay about $780 million to consumers. Under Cordray’s last two years, consumers received $250 million in FY2016 and $430 million in FY2017.
Overall, the Kraninger-led CFPB seems keen on utilizing enforcement as an important tool to protect consumers and punish bad actors.