CFPB Director Kathy Kraninger defended her agency’s payday loan rulemaking process on Monday, disputing claims that political appointees at the bureau have played an inappropriate role in deciding whether the strict rule should be repealed.
Senate Banking Committee Democrats had sent Kraninger a letter demanding that she re-start the rulemaking process following a New York Times story citing emails a departing staff member had sent alleging that political appointees improperly meddled in the rulemaking process.
She said that story “does not represent the robust process the bureau engaged in to develop” the rule.
In January 2018, the bureau announced it would reconsider the strict payday loan rule that had been adopted by former CFPB Director Richard Cordray. Kraninger said that ultimately the bureau received almost 200,000 public comments on a plan to rewrite the rule.
“With any major decision of the bureau, as well as countless subsidiary decisions, there are often views and ideas competing for consideration,” she wrote in the letter to the senators. “This results in thorough and informed debate and sometimes friction among bureau staff of all levels, including among both career and political appointees.”
The Times published a memo written by former staff member Jonathan Lanning that alleged that political appointees had meddled in the rulemaking process and were biased against the strict rule even before the process began.
The Democrats had said that if the memo is correct, the agency had ignored the Administrative Procedures Act that establishes the process by which rules are written.
After receiving the letter, Senate Banking Committee ranking Democrat Sherrod Brown of Ohio indicated he remained unconvinced that the process was properly followed.
“It’s ludicrous for Director Kraninger to dismiss her political appointees’ manipulation of economic research as just ‘informed debate’ – and it just shows the lengths the CFPB under the Trump administration will go to protect predatory payday lenders instead of consumers,” Brown said.