CFPB chief won’t be ‘puppet’
Kathy Kraninger says she’s now in charge, not Mick Mulvaney.
WASHINGTON — On her first full day leading the Consumer Financial Protection Bureau, Kathy Kraninger said she won’t be a puppet of Mick Mulvaney, the controversial acting director whom she replaced in the powerful regulatory position.
To underscore that point, the former White House aide said she would even reconsider a Mulvaney action that critics saw as a gratuitous jab at Democrats who championed the agency’s creation: changing its name to the Bureau of Consumer Financial Protection.
Kraninger’s declaration during a meeting with reporters Tuesday addressed one of the main criticisms of her selection. She is considered a protege of Mulvaney, her boss at the White House Office of Management and Budget who has executed an industry-friendly shift at the watchdog agency.
“I am incredibly grateful to Mick Mulvaney. He was a fantastic boss ... but I can tell you that I am here to be the director of this bureau, and I will be fully accountable for the decisions that I make going forward and they will be mine,” she said.
“I think the regulated industry, by and large, wants to comply” with consumer protection laws, Kraninger said. “But where there are bad actors we absolutely will take the enforcement actions to the full extent of the law and make sure we are protecting consumers.”
Still, during the 25-minute question-and-answer session, Kraninger did little to allay the other key concern of Democrats and consumer advocates — that she was unqualified for the job because she has no experience in finance, banking regulation or consumer protection.
The only specific priority Kraninger outlined Tuesday for her oversight of an industry rife with potential problems was examining how the bureau secures all the consumer data it collects.
Kraninger said she was focused on getting up to speed at an agency with 1,500 employees and a broad mandate to protect consumers when they take out credit cards and mortgages and use other financial products.
Mulvaney, an outspoken critic of the bureau, took over as acting director in 2017 in a controversial appointment by President Trump. Mulvaney scaled back enforcement efforts, moved to reassess tough new rules on payday loans and sought to rebrand the agency as the Bureau of Consumer Financial Protection.
He said that was the official name in the Dodd-Frank law, which created the agency in the aftermath of the financial crisis to prevent predatory lending and other abuses that led to it. But consumer advocates complained that the change was made to undermine the agency’s mandate by making it sound more bureaucratic while negating millions of dollars in advertising spent to make consumers aware of its existence after it opened its doors in 2011.
Kraninger had been the Office of Management and Budget’s associate director for general government since March 2017. She has about 20 years of federal government experience but mostly in homeland security and budget issues.
Kraninger was confirmed last week by the narrowest of margins — 50 to 49 — in a party-line Senate vote in which only Republicans voted for her.
On Tuesday, Kraninger offered a few olive branches to her critics. She said she was reaching out to Rep. Maxine Waters (D-Los Angeles), a strong supporter of the bureau who is likely to become chairwoman of the House Financial Services Committee in January.
Kraninger also said she expected to speak with Richard Cordray, who was appointed by President Obama as the bureau’s first director and was sharply criticized by Mulvaney and other Republicans.
And she even indicated she would reassess the bureau’s name change, acknowledging a reported internal analysis that found it would cost financial firms about $300 million to update databases, regulatory filings and disclosure forms.
“I am definitely going to be briefed on the name, and I can tell you that I care more about what the agency does than what it is called,” she said.
The name change “is not fully completed yet,” she said. Although Kraninger said she understood Mulvaney’s decision, she realized there were costs and worries from the staff.
But she didn’t appear to budge on another major concern of Democratic lawmakers and consumer advocates about a bureau official.
Eric Blankenstein, whom Mulvaney put in charge of enforcing fair lending laws, has acknowledged that in 2004, when he was 25, he wrote blog posts under a pen name questioning whether using the N-word made a person racist and claiming that a majority of hate crimes were “hoaxes.”
Kraninger said she had read about the matter and “certainly will take stock of everything going forward on that.” But then she indicated she was not inclined to take any action.
“I will take people at face value … in where they are today and what they’re doing for the bureau,” Kraninger said. The bureau has “1,500 employees, so I am not going to go back and look at everything they may have ever written in their lives.”