March 10, 2020

Brown: ‘Director Kraninger Should Return the Consumer Protection Bureau to Its Core Mission: Put Consumers First.’

Senator’s Opening Statement at Banking Committee Hearing on Consumer Financial Protection Bureau’s Semiannual Report to Congress; Today, Brown Released Report Outlining How CFPB Fails to Carry Out Mission, Betrays Americans Under Director Kraninger’s Leadership

WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – delivered the following opening statement at today’s hearing: “The Consumer Financial Protection Bureau’s Semiannual Report to Congress.”

Today, Brown released a report ahead of Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger’s report.

The report details the ways the agency has failed to live up to its mission under Director Kraninger’s leadership, including failing to defend the constitutionality of the CFPB, refusing to hold payday lenders accountable when they take advantage of servicemembers, letting student loan servicers off the hook and failing to enforce civil rights protections.

Sen. Brown’s remarks, as prepared for delivery, follow:

Thank you, Mr. Chairman.

First I want to say a few words about the coronavirus, and the toll it’s taking on our communities, on our health care system, and on our entire economy. Our first concern has to be for Americans’ safety. We also can’t ignore the millions of Americans who are losing paychecks and the small businesses that are losing customers. When times get tough, we come together as Americans and we rise to the challenge. I’m confident we can do that again – and it has to mean support for everyone who makes this country work, not just Wall Street.

Moments like this are a reminder of why we created the CFPB after the last financial crisis – to make sure hardworking Americans have a voice in the room, especially at times like this.

We know that in times of crisis, Wall Street has armies of lobbyists who will fight to make sure we do what we need to do to stabilize financial markets. But most people don’t have lobbyists and don’t have that kind of power. We have to fight for them too. And the CFPB is their voice.

During its first six years, the Bureau delivered results: the CFPB made new, strong rules that protected consumers from abusive practices. It sent Bureau employees into banks and other corporations to make sure they were following the law. And it returned more than $12 billion to 29 million Americans.

Unfortunately, President Trump has tried to turn the Consumer Protection Bureau into another agency that helps his wealthy friends at the expense of the people it’s supposed to serve.

Under President Trump’s first appointed director, Mick Mulvaney, the CFPB saw a shift away from protecting servicemembers and rooting out discrimination to doing favors for private corporations at the behest of political hires.

Director Kraninger has continued down the same path—corporate protection instead of consumer protection.

Under her leadership, we see a clear pattern: sabotaging the agency’s work to hold corporations accountable.

She sided with corporations – including a company the CFPB sued for scamming 9/11 survivors – to argue that the Bureau is unconstitutional in the Supreme Court.

It would be quite a coup for big banks and other corporations if the Supreme Court gutted the agency that’s supposed to keep an eye on them.

Director Kraninger has also allowed Education Secretary Betsy DeVos to block the Bureau from protecting the 43 million Americans with federal student debt.

If you don’t think that Director Kraninger’s failure to stand up to Secretary DeVos has consequences, talk to the tens of thousands of teachers, nurses, firefighters, and servicemembers who are paying more money in student loans every single month because Betsy DeVos denied them the loan forgiveness that they earned.

Like other Trump appointees, Director Kraninger has dutifully carried out the administration’s assault on civil rights protections:

  • She weakened rules that identify discriminatory lending.
  • She dismantled the CFPB office that used to ferret out discriminatory lending practices.
  • And she left Eric Blankenstein, a Mulvaney-era political appointee with a history of racist and sexist writings, in charge of enforcing civil rights laws.

And look at the result – under Mulvaney and Kraninger, the Consumer Protection Bureau has not brought a single case of illegal discrimination.

They have not returned a single dollar to victims of discrimination.

Last October we also learned that, in exchange for contributions to the Trump campaign, payday lenders were bragging about being able to “pick up the phone and get the President’s attention” to fend off regulation.

Director Kraninger has given them exactly what they paid for:

  • She gutted rules that would protect borrowers from predatory payday loans that trap them in cycles of debt.
  • She hasn’t filed any new lawsuits against payday lenders.
  • And she even let a payday lender keep $1.3 million it had volunteered to pay back to consumers it had ripped off.

It’s not just payday lenders. Director Kraninger has gone out of her way to let debt collectors and other corporations keep the money they scammed from consumers.

Just last week we learned that – as he was on his way out the door – Eric Blankenstein promised the CEO of Wells Fargo that he would hide the bank’s bad conduct and let them off without a fine.

Let’s be clear about what’s happening here – a CEO asks for a special favor, and he gets it. Never mind the cost to everyone else.

If a worker in Ohio gets laid off, or their car breaks down, and they can’t afford to pay their credit card bill that month, Wells Fargo is still going to charge them interest – they can’t call in any special favors to let them off the hook.

But we have seen over and over again that in President Trump’s Washington, Wall Street gets to play by different rules.

Director Kraninger also continues to surround herself with appointees with a history of bigotry and hostility to consumers.

She retained Paul Watkins, a Mulvaney appointee, who worked as senior legal counsel for a hate group that wants to criminalize LGBTQ people.

She also recently hired Leonard Chanin to serve as her number two.

This is someone who failed at protecting consumers at the Fed in the years leading up to the financial crisis.

More recently, he worked at a bank that is now under investigation for the same type of fake account fraud that we saw at Wells Fargo.

What we see from Director Kraninger is the same thing we see across the Trump Administration: protect corporations from accountability at all costs.

It comes back to one question – whose side are you on?

Wall Street megabanks, payday lenders, and other corporations all have enough allies looking out for them in the White House and in Mitch McConnell’s office.

The CFPB is supposed to be an independent advocate on the side of everyone else.

Director Kraninger should return the Consumer Protection Bureau to its core mission: put consumers first.

Anything less is a neglect of duty.

Thank you, Chairman Crapo.