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Financial Services Law Insights and Observations

Kraninger fields COVID-19 questions at Senate hearing

Federal Issues CFPB Senate Banking Committee Covid-19 FSOC Single-Director Structure Seila Law Supervision

Federal Issues

On March 10, CFPB Director Kathy Kraninger testified at a Senate Banking Committee hearing regarding the Bureau’s Semi-Annual Report to Congress. The hearing examined the report (covered by InfoBytes here), which outlines the Bureau’s work from April 1, 2019, through September 30, 2019.

In her opening remarks, Kraninger pointed to the newly announced measures that the Bureau has initiated to carry out the CFPB’s mission to prevent consumer harm, including the advisory opinion program, the updated Responsible Business Conduct bulletin, and proposed legislation to begin a whistleblower award program. (Covered by InfoBytes here.) In response to questions about the constitutionality of the CFPB’s structure, Kraninger stated that she was “incredibly encouraged” when the Supreme Court granted certiorari in Seila Law as it should provide “certainty and clarity.” Kraninger also addressed the Bureau’s COVID-19 preparedness by saying that the financial regulators are in “routine contact with the institutions we regulate” and that they maintain a steady flow of information with the Treasury Department, as well as with OPM, CDC, and FEMA to ensure coordinated operations. A number of Senators asked about the effects of COVID-19 on the economy, including with respect to new scams designed to take advantage of panicked consumers, consumers losing pay and benefits due to employer shut downs, and whether financial institutions are making accommodations for consumers during this time. Kraninger responded that financial institutions will have “supervisory flexibility” to help consumers and ensured that the CFPB is taking steps such as encouraging the public to attend the Bureau’s events via webcast. She also confirmed that the Financial Stability Oversight Council, of which she is a member, will meet this month. Other covered topics included small dollar loans and payday lending, supervision and enforcement, and the timeline for rulemaking on amendments to the qualified mortgage and ability to repay requirements. (Covered by InfoBytes here.)

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