Dem-led House panel grills consumer watchdog chief

WASHINGTON — The government’s consumer watchdog agency came under new scrutiny from the House Financial Services Committee, now controlled by Democrats who say the appointees chosen by President Donald Trump to lead the organization have undermined its mission to protect Americans.

A fresh rebuke came Thursday from the committee’s chairwoman, Rep. Maxine Waters, D-Calif., as the new head of the Consumer Financial Protection Bureau appeared before the panel.

In December, Kathy Kraninger succeeded Mick Mulvaney, now Trump’s acting chief of staff. Mulvaney hired GOP operatives to oversee nearly all of the agency’s operations.

“The Trump administration has undertaken a sustained effort to destroy the agency,” Waters said. “I’m committed to reversing the damage that Mulvaney caused.”

As a congressman from South Carolina, Mulvaney described the bureau as a “sick, sad” joke. When he was made director, Mulvaney pushed for cutbacks on many of the rules and regulations that were put into place under the first director during the Obama administration.

Democrats opposed Kraninger’s appointment in the fall, saying she had little relevant experience. She’s an attorney who had worked as a mid-level official in the White House’s budget office, most recently under Mulvaney, but has no experience in financial services or consumer protection and had never run a federal agency.

The CFPB was created as an independent agency by the landmark DoddFrank law that overhauled the regulations governing Wall Street and banks in the wake of the 2008-09 financial crisis.

Republicans assailed the CFPB under President Barack Obama’s appointee as director, saying he had overreached with his actions taken against companies selling financial products and services.

In a major move under Kraninger, the agency said last month that it plans to abolish most of its critical consumer protections governing payday lenders. It’s a big win for the payday lending industry, which asserted that the government’s regulations could kill off a large chunk of its business.

Consumer groups say payday lenders exploit the poor and disadvantaged with loans carrying annual interest rates as high as 400 percent.

The cornerstone of the regulations is a requirement that lenders ensure that borrowers can afford to repay a payday loan without being stuck in a cycle of debt — a standard known as “ability to repay.”

Asked about the move on payday lending, Kraninger told the hearing that the practice “has a number of impacts on a number of different consumers.”

The agency’s plan is still at a proposal stage, she said.

Waters has proposed legislation that would direct Kraninger to reverse Mulvaney’s actions as head of the CFPB in the areas of student loans, consumer complaints, fair lending rules and others. Waters’ bill has gained several dozen Democratic supporters in the House.

Kraninger insisted, under a shower of criticisms and questions from Democrats, that she is not under the political influence of Trump or Mulvaney.

“I absolutely take seriously the responsibility vested in me, and the decisions I take at the CFPB are my decisions,” Kraninger said.

Republicans defended Kraninger, accusing Democrats of setting a contentious tone after they “berated and badgered” her.

At least one GOP lawmaker acknowledged he would prefer that the agency be abolished altogether, if possible.

“The good news is that it’s a new day at the CFPB,” said Rep. Patrick McHenry, R-N.C. He decried “the ugly history of regulation by enforcement” during the Obama administration as “dangerous and destructive.”

The CFPB has the authority to scrutinize virtually any business selling financial products and services.