Consumer Financial Protection Bureau Director Kathleen Kraninger resigned Wednesday, at the request of President Biden.
Seila Law had challenged the constitutionality of the structure of the Consumer Financial Protection Bureau and won in the Supreme Court. The Supreme Court returned the issue of the legality of the actions against Seila Law back to the appellate court. The CFPB just won that portion of the case in the 9th Circuit Court of Appeals.
House Financial Services Chairman Maxine Waters wrote a 45-page letter to President-elect Joe Biden listing all the regulatory decisions that were made in the last four years in the agencies under her committee’s jurisdiction that she thinks should be reversed when he gets into office. She also wants Consumer Financial Protection Bureau Director Kathleen Kraninger fired.
Consumer Financial Protection Bureau Director Kathleen Kraninger has appointed five new members of her executive team, less than two months before she can expect to be removed from her position by the new president. In addition, she released a new advisory opinion policy that the new administration may not like. The Trump Administration is trying to make the CFPB more corporate-friendly before the Biden Administration takes over and attempts to return it to a strict regulatory agency protecting consumers.
The incoming Biden Administration must “urgently” act to reverse the Consumer Financial Protection Bureau’s payday lending and debt collection rules, the government watchdog group, Accountable.US said last week. “Over the course of the past four years, the Trump administration has enacted corrupt and harmful policies across environmental, immigration, economic, and many other issues for special interests, many with close ties to the Trump administration, that will negatively impact generations of Americans,” the group said, in announcing the first five rules it wants the administration to overhaul. “To help reverse the damage done, we’re tracking key policies that the next administration
It appears that the new payday loan regulation will be scrapped in the next administration, but the CFPB is continuing the rulemaking process anyway.
Credit union lobbyists and consumer advocates expect Biden to remove Kraninger and return the CFPB to its rules made under the Obama administration. Here is a long list of what may change back to the way it was.
If Joe Biden wins the election, he can be expected to replace the CFPB Director quickly and that new director is likely to restore the strict payday lending rule that was adopted during the Obama Administration, according to CUNA Chief Advocacy Officer Ryan Donovan. Donovan gave credit unions a heads up on what may happen next year.
The National Association for Latino Community Asset Builders filed suit in U.S. District Court against the Consumer Financial Protection Bureau, demanding that the original payday lending rule be restored. The lawsuit specifically targets the no-underwriting lending portion of the rule, saying that it helps lenders, not consumers, contrary to the consumer protection mission assigned to the CFPB.
Disagreement over the Consumer Financial Protection Bureau’s payday lending rule is in federal court, with the CFPB arguing that just because its original structure was found unconstitutional, its rules are still valid.