New Consumer Financial Protection Bureau Director Kathy Kraninger attempted Wednesday to relieve political tensions in laying out her vision for the watchdog agency.
While Kraninger made nods to a diplomatic but conservative-leaning approach to the bureau that Sen. Elizabeth Warren, D-Mass., helped create, she still faces skepticism over whether, as a Trump appointee, she intends to defang the bureau.
Speaking at the Bipartisan Policy Center in downtown Washington, Kraninger said she would write a formal definition of “abusiveness,” which the bureau is tasked with policing. The financial industry has sought such a definition.
Under former Director Richard Cordray, banks and other parts of the financial services industry complained that the bureau would effectively create rules through enforcement under its authority to prevent abusive and deceptive actions. Kraninger’s definition of the term could put her stamp on the bureau.
Kraninger said she instead hopes to limit the need to punish bad actors through better consumer education and guidance to industry over acceptable practices.
She has asked her staff to review the process through which the bureau examines companies for violations of the law for efficiency and effectiveness, with the goal of “fostering a culture of compliance and preventing harm.”
Consumer advocates are skeptical.
“It remains to be seen,” said Linda Jun, senior policy counsel for Americans for Financial Reform, a group that is often critical of the financial services industry and opposed many of the decisions made by Kraninger’s predecessor and former boss, acting White House chief of staff Mick Mulvaney. Jun spoke on a panel that followed Kraninger’s appearance.
Richard Fischer, co-chairman of the Bipartisan Policy Center’s Consumer Protection Task Force and a financial services lawyer, countered that under Kraninger’s short tenure of four months, the bureau has already engaged in seven enforcement actions.
“I see enforcement continuing. I see enforcement continuing as part of a focus on rules rather than guidance,” said Fischer.
The tone for Kraninger’s tenure is likely to be set quickly. The bureau faces upcoming decisions about updating rules governing debt collection and revisiting a major payday lending rule.
[Opinion: Kathy Kraninger will reform the CFPB and bring consumers relief]
