House Financial Services Dems Clash With Kraninger, Republicans Over CFPB Powers

Following a now-familiar script, Democrats on the House Financial Services Committee on Thursday accused CFPB Director Kathy Kraninger of abdicating her duties, while Republicans said she has appropriately changed the direction of the bureau.

From the agency’s guidance on use of the word “abusive” in federal law to the agency’s payday lending rule, Democrats bitterly clashed with Kraninger and committee Republicans.

“You have taken several actions that undermine the consumer bureau,” House Financial Services Chairwoman Maxine Waters (D-Calif.) said during the committee’s semi-annual review of the agency’s work. “While I’m appalled, I must say that I’m not surprised.”

She added that under Kraninger’s regime, “it’s a great time for bad actors to rip off consumers.”

Rep. Patrick McHenry of North Carolina, the committee’s ranking Republican, said that Kraninger made appropriate changes at the bureau to bring fairness to the agency.

“I applaud the job you are doing,” added Rep. Blaine Luetkemeyer (R-Mo.).

Kraninger said she has tried to shift the focus of the bureau to “preventing harm in the first place.” She added that she has attempted to provide “clear rules of the road.”

“Preventing harm to consumers, I believe, is the most effective, efficient way to carry out our mission of ensuring consumer access to a fair, transparent and competitive market,” she said.

Kraninger and the committee’s Republicans cited her recent decision to provide guidance to help define “abusiveness” as a sign the agency is trying to bring clarity to its oversight.

Waters disagreed, telling the director, “You’ve made it harder for your own agency to crack down on abusive acts by financial institutions. With this policy statement, you have made it clear that under your watch bad actors will come first and consumers will come last.”

McHenry also praised Kraninger for abandoning the agency’s defense of its structure. A case challenging the single-director structure of the agency is pending before the Supreme Court.

He said he believes the structure will be found to be unconstitutional and that Congress should be prepared to step in and restructure the agency.

Kraninger also told the committee she expects that in April, the bureau will issue final rules governing payday lending.

Rep. Denny Heck (D-Wash.) criticized Kraninger for determining that the agency does not have jurisdiction over the Military Lending Act. Kraninger said legislation is needed for that, and Heck disagreed.

“You have the authority,” he told Kraninger. “You should start using it.”