Brown Pleased With Kraninger’s Move to Kill CFPB Reorganization
CFPB officials say they are suspending the reorganization plan announced shortly before the election.
Although Senate Banking Committee ranking Democrat Sherrod Brown of Ohio seldom agrees with CFPB Director Kathleen Kraninger, Brown said Tuesday he is pleased that the director has shelved an agency reorganization plan.
“Director Kraninger did the right thing by agreeing to my request to suspend the reorganization,” Brown said. “It is entirely inappropriate for an outgoing administration to weaken the bureau’s ability to hold financial institutions accountable. At this point, new CFPB leadership under President Biden should determine the future direction of the agency.”
Bloomberg Law reported Monday that in an email to staff, CFPB officials said they were suspending the reorganization plan. CU Times obtained a copy of the email and confirmed the reorganization plans have been suspended.
In recent weeks, CFPB officials defended the proposal, which was announced shortly before Election Day.
“Over the past seven-plus months, the Supervision, Enforcement and Fair Lending Division has undertaken a review of their operations, including extensive input from SEFL staff and others throughout the bureau,” a CFPB spokesperson said on Oct. 23. “On the basis of that review, SEFL delivered to the director recommendations to improve SEFL’s structure in order to facilitate the division’s critical work in exercising two of the bureau’s four tools to protect consumers: Supervision and enforcement.”
However, Kraninger’s reign at the CFPB is likely to end when President-elect Joe Biden takes office. Biden has formed a transition team that includes advocates of a strict regulatory regime at the agency. For instance, the CFPB transition team is headed by Leandra English, who served as deputy director during the Obama Administration.
Brown and more than 80 consumer groups have said Kraninger’s reorganization plan would have weakened the agency.
For instance, Brown said Kraninger has decided to disband a team that determines the enforcement division’s overall priorities and stripped the enforcement division of a vote in deciding whether potential violations should be resolved through examinations or an enforcement action.
In a letter to Kraninger, some 83 consumer groups also blasted the plan.
“Instead of strengthening the arm of the CFPB that holds predatory financial institutions accountable, your proposal would drastically weaken its authority, independence and ultimately, effectiveness, leaving consumers vulnerable and defenseless,” the groups, including the Consumer Federation of America, the National Consumer Law Center and Better Markets, wrote in a letter to the director earlier this month.