The CFPB’s Semi Annual Report took a backseat to discussions about the constitutionality of the leadership structure.
10/17/2019 9:00
Following a lengthy, somewhat contentious appearance before the House Financial Services Committee Wednesday, CFPB Director Kathy Kraninger was back in the spotlight Thursday answering questions from members of the Senate Banking, Housing and Urban Affairs Committee.
While attendance from Senate committee members was light due to conflicts in schedules, several key members—including Chairman Mike Crapo, R-Idaho, and Ranking Member Sherrod Brown, D-Ohio—were present to question, praise and criticize Kraninger.
Crapo kicked off the 90-minute hearing by thanking Kraninger for her significant efforts in creating new initiatives to foster innovation, vigorously protect consumers, and ensure that consumers have access to a wide range of financial products and services.
This was quite a change in tone compared to Wednesday’s House hearing when Financial Services Committee Chairman Maxine Waters, D-Calif., opened the meeting by telling Kraninger, “I am deeply concerned by your anti-consumer actions.”
A discussion on the bureau’s structure also found its way into the Senate hearing via Crapo, who said, “It remains clear that the fundamental structure of the CFPB must be reconsidered to make it more transparent and accountable. I support the transition of the CFPB to a bipartisan commission from a single director; subjecting the CFPB to appropriations; and providing a safety and soundness check for prudential regulators.”
This will be an important issue for the accounts receivable management industry in terms of stability and certainty for the rulemaking process, as it wiggles through the court system, most recently appearing in the news when the CFPB’s attorneys and the U.S. Department of Justice filed a brief asking the Supreme Court to take it up Seila Law v. Consumer Financial Protection Bureau. It has long been understood that many Democrats support the current structure of the bureau, which includes a director removable only “for cause.”
In response to criticism from Brown, who noted that Kraninger previously weighed in on the issue, Kraninger said, “Since the earliest days of the CFPB, the constitutionality of the director’s removal provision has been raised and challenged legally by the bureau in pursuit of our mission. Litigation over this question continues to cause significant delays in some of our enforcement and regulatory actions. I believe this dynamic will not change until the constitutional question is resolved by the Supreme Court or Congress. My position on this question will not stop the bureau from fulfilling its statutory responsibilities.”
In other business, Sen. Catherine Cortez Masto, D-N.Y., complimented Kraninger for allowing the consumer complaint database to remain public. The senator was referencing the CFPB’s recent release of enhancements to the database, including a commitment to ensuring that it is publicly available and providing certain prominently displayed disclosures, making it clear that the database is not a statistical sample of consumers’ experiences in the marketplace.
And in her written testimony, Kraninger provided the following additional information about the consumer complaint database:
“The most recent Semi-Annual report notes 321,200 consumer complaints for the April 2018-March 2019 period. The report also notes that 82 percent of these complaints were received via the Bureau website, 5 percent via phone calls, 8 percent via referrals from other state and federal agencies, and the remainder via mail, email, or fax. The Consumer Bureau estimated that about 95 percent of the complaints it sent to companies received a response. Additionally, the Consumer Bureau highlighted that the most complained about consumer financial products and services were credit or consumer reporting (39 percent of all complaints), debt collection (24 percent), and mortgages (9 percent). According to a May 2019 analysis of the CFPB’s consumer complaint database since its creation in 2011, more than 223,000 complaints resulted in relief for consumers, including more than 75,000 who received monetary relief from the companies they complained about.”
ACA’s coverage of the House hearing Wednesday may be accessed here.