U.S. Senate Confirms Kathy Kraninger as BCFP Director

Kraninger will serve a five-year term upon being sworn in by President Donald Trump.

12/6/2018 3:00 PM

U.S. Senate Confirms Kathy Kraninger as BCFP Director

In a 50-49 vote Thursday, the U.S. Senate confirmed Kathy Kraninger to serve a five-year term as director of the Bureau of Consumer Financial Protection.

Following the vote, ACA International CEO Mark Neeb sent a congratulatory letter to Kraninger.

“ACA International looks forward to working with Director Kraninger and the new leadership at the BCFP," Neeb said. "It is imperative that leadership at the bureau understands that consumers are best served by common-sense regulation and transparency, so that the accounts receivable management industry can operate effectively with clear rules. ACA looks forward to working with the new leadership to provide important information related to the impact of the bureau’s work on the accounts receivable management industry and in pursuit of our shared goal of improving consumer outcomes.”

Kraninger will replace Acting Director Mick Mulvaney, whom she worked with at the Office and Management and Budget (OMB.) Kraninger started as a program associate director for general government at the OMB in March 2017.

The BCFP met with its Consumer Advisory Board Thursday for its winter meeting as Kraninger’s confirmation vote occurred on the Senate floor.

In introductory remarks, Mulvaney said that while he was not involved in Kraninger’s selection as the BCFP director nominee, “I could not have picked somebody better for this job. Kathy is going to be an absolute tremendous leader here. The bottom line I think is the transition will be seamless and I know she will very much value the input of these groups.”

Last week, the U.S. Senate voted along party lines to end debate (50-49) on Kraninger’s nomination as director of the BCFP and move forward with the final vote in the lame duck session.

“Ms. Kraninger brings a wealth of experience to an agency in need of a renewed consumer focused mission,” said Senate Majority Leader Mitch McConnell, R-Ky., before the vote Thursday.

In November, McConnell advanced consideration of Kraninger’s nomination as director of the BCFP—five months after the Senate Banking Committee voted 13-12 along party lines in favor of her role to lead the bureau—thus advancing it to the Senate floor.

ACA International urged the Senate to move forward to confirm Kraninger after McConnell advanced consideration of the vote as it will bring certainty to the accounts receivable management industry as it awaits a debt collection rulemaking next year. Other areas of interest to ACA concern information on the bureau’s compliance priorities and the potential for legislation to change its leadership structure and funding appropriations.

Neeb’s letter to Kraninger, available on ACA International’s online BCFP Resource Center, outlines ACA’s plan for working with the bureau’s leadership along with priorities the association encourages the bureau to consider as it moves forward with rulemaking positioned to impact the accounts receivable management industry.

“We look forward to continue working with the bureau in pursuit of clarity surrounding outdated laws for our industry, most pertinently the Fair Debt Collection Practices Act, (FDCPA) which currently does not account for several modern methods of communication with consumers,” Neeb said.

He outlined several areas of consideration for the bureau under Kraninger’s leadership.

ACA Urges the Bureau to Take into Account the Feedback Provided During its Extensive Request for Information Process

While the consumer perspective is critically important, it is also essential to consider diverse perspectives and real-world in-house experience of those working to actually provide products and services to consumers. This benefits both consumers and those serving them when the Bureau can craft more informed rules and policies, which take into account the actual impact of new compliance and regulatory burdens, and the unique needs of different consumers throughout the country ...We ask that as the Bureau moves ahead into a new era of leadership, that it carefully considers the input collected from ACA’s members and compiled as part of this process.

ACA Urges the Bureau to Continue to Host Industry Roundtable Discussions

ACA has been appreciative of more recent opportunities for open dialogue, and we would urge the Bureau to continue to hold industry and consumer group roundtables to facilitate transparent discussions with all stakeholders ... However, ACA also recommends that the Bureau consider having a nonbank advisory board since the debt collection industry often only has one, or as is currently the case zero, seats on the Consumer Advisory Board (CAB). 

ACA Supports Clarifying the Fair Debt Collection Practices Act

It is important for the BCFP to carefully consider its proposals from the perspectives of both the consumer and the debt collector and find the reasonable balance that ensures the full intent of the FDCPA. Neeb also outlined several proposals for consideration in the bureau’s rulemaking expected next year.

Pre-Rule Actions Surrounding Debt Collection Need to be Improved Upon

ACA member companies support fair, objective, and well-supported Bureau rulemaking that is focused on clarifying legal obligations for debt collectors and solving problems for consumers and regulated entities ... The following pre-rule actions by the Bureau need to be improved upon: a flawed and non-transparent consumer survey; failure to conduct effective consumer disclosure testing; and a misconceived SBREFA panel process that failed to include critical participants.

The BCFP’s Complaint Database Paints an Inaccurate Portrait of the Debt Collection Industry

Providing better understanding of, and perspective, on the debt collection marketplace would better serve the Bureau – and consumers – in the Bureau’s analysis of the debt collection industry. The Bureau should focus its resources on actual consumer harm rather than raw numbers of complaints provided without context.

More Transparency and Due Process Should be Included in BCFP Enforcement Processes

Concerns are widespread about the Bureau’s practice of characterizing conduct as an unfair, deceptive, or abusive act or practice (UDAAP) without prior notice, and then holding other businesses accountable under this retroactive interpretation of legally required or proscribed behavior. Moreover, it remains unclear how the Bureau defines UDAAP, with the “abusive” prong continuing to be a particularly subjective matter for individual enforcement attorneys and examiners.

In July, Kraninger outlined priorities for leading the bureau if she were confirmed in testimony before the Senate Banking Committee.

“Congress established the Bureau of Consumer Financial Protection ‘to ensure all consumers have access to markets for consumer financial products and services…that are fair, transparent, and competitive.’ I am firmly committed to satisfying this Congressional mandate,” Kraninger said in her testimony.

Kraninger’s four priorities in her testimony include:

  • “The bureau should be fair and transparent, ensuring its actions empower consumers to make good choices and provide certainty for market participants. In particular, the bureau should make robust use of cost benefit analysis, as required by Congress, to facilitate competition and provide clear rules of the road.”
  • “The bureau should work closely with the other financial regulators and the states on supervision and enforcement. Under my stewardship, the Bureau will take aggressive action against bad actors who break the rules by engaging in fraud and other illegal activity.”
  • “The bureau must recognize its profound duty to the American people to protect sensitive information in its possession. Under my leadership, the bureau would limit data collection to what is needed and required under law and ensure that data [are] protected.”
  • “The bureau must be accountable to the American people for its actions, including its expenditure of resources.”

In general, Kraninger expressed support for limiting and reviewing the bureau’s past “regulation by enforcement” approach, using data-driven decision making within the law and working with members of Congress on both sides of the aisle.

ACA International is also monitoring the potential impact Kraninger’s confirmation could have on the timing of the debt collection rulemaking.

Tom Pahl, the BCFP’s policy director for research, markets and regulation, also recently told attendees at  ACA International’s 2018 Fall Forum & Expo, that the bureau is proceeding with the March 2019 timeline for the Notice of Proposed Rulemaking and that at this time he does not anticipate the confirmation of a permanent director to impact that timing.

Related Content from ACA International:

U.S. Senate Ends Debate; Moves Ahead to Final Vote for Kathy Kraninger to Serve as BCFP Director

BCFP Director Confirmation Hearing Sets the Stage for Continued Discussion of Reform at the Bureau

U.S. Senate to Consider Kathy Kraninger’s Nomination for BCFP Director

BCFP’s Tom Pahl Provides Candid Update on Debt Collection Rulemaking

Senate Banking Committee Approves Nomination of Kathy Kraninger to Head BCFP

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