GAO: Trump’s CFPB Couldn’t Justify Reorganization of Fair Lending Office

Appearing to confirm the suspicions of Democratic critics, the Government Accountability Office reported Monday that the Trump Administration haphazardly reorganized the consumer bureau’s fair lending office, resulting in confusion at the agency and a drop in enforcement actions.

In a scathing report, the Government Accountability Office said the Consumer Financial Protection Bureau, under then Acting Director Mick Mulvaney and then former Director Kathleen Kraninger, failed to produce any documentation to justify transferring the agency’s Office of Fair Lending and Equal Opportunity to another branch in the director’s office.

The reorganization resulted in many of the fair lending office’s 38 employees being scattered throughout the agency, the GAO said.

At the time the reorganization was announced, Democrats on Capitol Hill said they were certain that the reorganization would neuter any fair lending efforts.

Indeed, the GAO said that in the year 2018, the CFPB opened the fewest enforcement cases for each year between 2014 and 2020. In addition, the agency did not take any fair lending-related public enforcement actions connected to investigations it had closed.

In a response to the report, Acting CFPB Director Dave Uejio, a Biden Administration appointee, said that the agency has established enforcement of fair lending laws as a high priority and will assess the impact the reorganization has had on the agency. The Biden Administration has made it clear that it wants the CFPB to regain the clout it had during the Obama Administration.

When Mulvaney announced the reorganization, he said in an email to employees that it would result in making the agency more efficient, effective, and accountable. But the GAO said, “The email did not include specific examples of what those benefits would look like.”

In addition, the GAO said that the Trump Administration CFPB leadership:

  • Failed to consult with fair lending staff to discuss the potential costs and benefits of the reorganization.
  • Failed to track progress toward stated goals for the reorganization.
  • Failed to assess the results of the reorganization.
  • Began using “supervisory recommendations” in place of “matters requiring attention.” The new designation did not require entities to implement the recommended action, while “matters requiring attention” did. In March, the Biden Administration announced it would no longer issue supervisory recommendations.
  • Stopped including certain fair lending performance goals and related measures in the agency’s annual report. “Since 2019, the only measure specific to fair lending activities in CFPB’s annual performance reports has been related to outreach and education,” the GAO said.
  • No longer allowed the agency’s remaining fair lending staff to determine priorities for fair lending examinations and enforcement. Instead, those decisions were made by the Office of Supervision Policy.


GAO Report to Congressional Requesters on CFPB Fair Lending Reorganization

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