InfoBytes Blog
House report blames CFPB "politicization" for drop in consumer relief
On October 16, Maxine Waters, Chairwoman of the House Financial Services Committee, released a majority staff report titled, “Settling for Nothing: How Kraninger’s CFPB Leaves Consumers High and Dry,” which details the results of the majority’s investigation into the CFPB’s handling of consumer monetary relief in enforcement actions since Richard Cordray stepped down as director in November 2017. The report argues that, under the leadership of Acting Director Mick Mulvaney and Director Kathleen Kraninger, the Bureau’s enforcement actions “have declined in volume and failed to compensate harmed consumers adequately.” Specifically, the report states that under Cordray’s leadership, “the average enforcement action by the [Bureau] returned $59.6 million to consumers, as compared to an average $31.4 million per action under Mulvaney,” but notes that $335 million of the $345 million in consumer relief obtained during Mulvaney’s tenure resulted from one settlement with a national bank (previously covered by InfoBytes here). With respect to Director Kraninger, the report acknowledges that the pace of enforcement actions increased compared to Mulvaney; however, the Bureau ordered “only $12 million in consumer relief” during her first six months, as compared to “approximately $200 million in consumer relief” during a similar six months of Cordray’s tenure.
The report highlights specifics from the investigation into settlements announced in early 2019, which resulted in civil penalties but not consumer monetary relief. The report argues that, based on the review of the internal documents received from the Bureau, the lack of consumer relief was due to the “politicization of the [Bureau],” which “contributed to the decline in the [Bureau]’s enforcement activity” rather than the merits of the enforcement actions, notwithstanding that the internal documents reflect the assessment of certain weaknesses in the Bureau’s positions. The report attributes such politicization to the introduction of political appointee positions throughout the Bureau that oversee each of the divisions. The report concludes by urging Congress to pass the Consumers First Act (HR 1500), which, among other things, seeks to limit the number of political appointees at the Bureau.