The Democratic senator who conceived of the Consumer Financial Protection Bureau more than ten years ago told CFPB Director Kathleen Kraninger that the agency is doing little to protect consumers during the pandemic.
“Your leadership has been a miserable failure based on your actions in this pandemic,” Sen. Elizabeth Warren (D-Mass.) told Kraninger during a Senate Banking Committee hearing on oversight of the agency. “You should resign.”
As a law professor at Harvard University’s Law School, Warren proposed the CFPB, which eventually was included in Dodd-Frank.
Warren said that instead of taking action against companies abusing consumers during the pandemic, the bureau has said that as long as companies make a “good faith” effort to follow the law, the bureau will not take action against them.
Warren called that “an invitation to break the law.”
Kraninger defended her work at the bureau. “Since the first days of the pandemic, the Bureau has taken swift action to protect consumers and ensure financial institutions have the direction and flexibility to work with their customers in need,” she said.
Senate Banking Chairman Mike Crapo (R-Id.) praised Kraninger’s work during the pandemic.
“The CFPB has also announced several policies and valuable educational initiatives intended to help consumers take steps to protect their finances during the COVID-19 emergency, and to ensure that regulated entities can take reasonable and prudent steps to assist communities impacted by the coronavirus,” he said. “
“I commend Director Kraninger and her staff for taking these steps to help consumers, families and small businesses as they continue to weather this global coronavirus pandemic.”
Banking Committee ranking Democrat Sherrod Brown of Ohio said Kraninger has taken the pandemic as an opportunity to roll back protections.
“I’ve got to hand it to you, you’ve done exactly the job [President Trump] asked of you– you have protected a system where corporations play by one set of rules, with a different set for everyone else,” he said.
Several Democrats zeroed in on the CFPB’s decision to eliminate the requirement that prospective borrowers demonstrate to a payday lender that they have an ability to repay a loan before the loan is approved.
Kraninger said that requirement was particularly onerous and inhibited competition in the industry. She said that if the strict payday loan rule that former CFPB Director Richard Cordray proposed had been allowed to go into effect, 70% of the nation’s payday lenders would have gone out of business.