Consumer Financial Protection Bureau chief grilled by Democrats

"I'm committed to reversing the damage that Mulvaney caused," Rep. Waters said

March 7, 2019, 1:46 PM

House Democrats grilled the Consumer Financial Protection Bureau director Thursday, arguing that the consumer watchdog has failed under the Trump administration.

House Financial Services Committee Chair Maxine Waters, D-Calif., criticized former CFPB acting head Mick Mulvaney during a hearing with current CFPB Director Kathy Kraninger, and said that she was "committed to reversing the damage that Mulvaney caused," adding that she wants to ensure that "the consumer bureau can continue its important work."

Since Waters took control of the House Financial Services Committee at the start of the year, she has outlined consumer issues as a significant priority for the committee. A key focus for Waters is undoing many of the regulatory measures taken at the CFPB by Mulvaney during his time as acting director.

PHOTO: Kathy Kraninger, director of the Consumer Financial Protection Bureau (CFPB) speaks during a Senate Banking Committee confirmation hearing in Washington, July 19, 2018.
Kathy Kraninger, director of the Consumer Financial Protection Bureau (CFPB) speaks during a Senate Banking Committee confirmation hearing in Washington, July 19, 2018.
Andrew Harrer/Bloomberg via Getty Images

Kraninger replaced Mulvaney to lead the CFPB in December, a role he held concurrently with his former position leading the Office of Management and Budget. He now serves as President Donald Trump's acting chief of staff.

While at the agency's helm, Mulvaney, an outspoken critic of the CFPB, dismissed an advisory board, dropped several significant enforcement actions against payday lenders and -- at one point -- asked for a zero dollar appropriation to fund the agency.

Rep. Bobby Scott, D-Va., on Thursday reiterated Waters' disapproval of Mulvaney's leadership.

"Director Mulvaney did some very, very terrible things in his position as director that really affected what is the sole purpose of the CFPB -- consumer protections," Scott said.

Scott went on to ask for Kraninger's support on the Consumer First Act, which he said would "reverse" various policies implemented under Mulvaney that aimed to rollback regulations.

"I don't see how in the world you can't," Scott said.

Kraninger responded, "Congressman, I very much support your oversight actions."

Republicans on the committee applauded the steps Kraninger has taken in her new role since replacing Mulvaney. Ranking member Patrick McHenry, R-N.C., said Kraninger's leadership has eased Republicans' concerns about governmental overreach that have existed since the bureau's inception.

"Our concerns were driven by the fear that Congress was creating one of the most powerful and unaccountable bureaucracies ever. Unfortunately we were right," McHenry said.

Though under Kraninger, McHenry said, "It is a new day at the CFPB."

Kraninger pushed back during the hearing on questions about whether her decisions were impacted by Mulvaney or President Donald Trump.

"The decisions that I take at the bureau are my decisions," Kraninger said.

She said she has not spoken to Trump since she began leading the agency and has only seen Mulvaney socially.

When asked by Rep. Lacy Clay, D-Mo., if she was prepared to reverse actions by Mulvaney, Kraninger said, "I pledge to you, Congressman, that protection of consumers and the mission of this agency is at the heart of every decision that I will make, and certainly has been at the heart of every decision I have made so far."

Mulvaney declined a request from the committee for testimony at Kraninger's hearing Thursday, according to Waters.

"This committee still has serious questions for him, so I'm expecting our new director to answer for him," Waters said of Kraninger.

The CFPB was created after the 2008 financial crisis as a way to regulate banks and other financial institutions.

During a press conference Wednesday to reintroduce consumer watchdog legislation, Waters said she had so far only had an "informal meet and greet" with Kraninger and intended to use Thursday's hearing to determine whether or not Kraninger was "on the road to repairing" the watchdog bureau.

Kraninger's appearance before the committee was is her first since taking the reigns of the agency. Her appointment in December marked the end of a controversy over bureau leadership and brought with it fierce criticism from Democrats and consumer watchdog groups.

During her relatively short tenure, Kraninger has brought five enforcement actions.

She has also announced the bureau's plans to reconsider a rule that would've prevented payday lenders from issuing loans to borrowers who could not demonstrate an ability to repay, a move met with criticism by groups who allege that Kraninger is continuing Mulvaney's deregulatory policy.

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