Kraninger Defends Decision to Abandon Defense of CFPB’s Structure
Kraninger testifies that since the agency’s earliest days, there have been constitutionality questions raised about its structure.
Amid sharp criticism of her position, CFPB Director Kathy Kraninger on Thursday defended her decision to abandon the agency’s defense of its current structure.
“Litigation over this question continues to cause significant delays in some of our enforcement and regulatory actions,” she told the Senate Banking Committee.
Kraninger said that since the agency’s earliest days, there have been constitutionality questions raised over whether the agency’s structure, which calls for a single director who can only be removed for cause.
There have been several legal challenges to that structure and until recently, the CFPB has argued that it is constitutional. Kraninger recently abandoned that defense and the agency is now siding with plaintiffs challenging the legality of the structure.
Senate ranking Democrat, Sherrod Brown of Ohio, said that Kraninger’s new position contradicts statements she made during her confirmation hearing, when she said she would not take sides on the question.
“If someone comes to Congress, commits to do one thing and then does another, that’s lying to Congress,” he told Kraninger.
Kraninger said Executive Branch officials must uphold the Constitution and that she believes the structure of the agency is unconstitutional.
Brown also blasted Kraninger for failing to take enforcement actions “against scammers and shady debt collectors.”
“After ten months on the job, it’s clear why President Trump selected you to head the Consumer Financial Protection Bureau– because he can count on you to protect Wall Street banks, payday lenders, shady debt collectors, and other companies that prey on hardworking Americans,” he said..
He added, “Under your leadership, crooked corporations have no real incentive to follow the law.”
However, Senate Banking Chairman Mike Crapo (R-Id.) told Kraninger she was doing an effective job in ensuring that people have access to financial services they need.
And Crapo agreed that the constitutionality question must be settled.
“I continue to support transitioning the CFPB to a bipartisan commission from a single director; subjecting the CFPB to appropriations; and providing a safety and soundness check for the prudential regulators,” he said.