Kraninger Outlines CFPB Roadmap, Success Factors

In a series of statements and interviews, Kathy Kraninger, the new director (as of December of 2018) of the Consumer Financial Protection Bureau, has laid out a number of strategic priorities and processes for the bureau.

Some things will change, some will remain the same.

As detailed in a conversation with Reuters, Kraninger said that the CFPB will continue with a number of reviews that trace their genesis to her predecessors (including former interim director Mick Mulvaney), including operational aspects of the CFPB’s public complaints database.  She told the newswire that the database, which can give the impetus to open investigations into various lending and enforcement activities, “is on the agenda” this year – and under discussion should be the very nature of what the database, which has been a public enterprise for roughly seven years, “should be.”

The database may even become a private endeavor – that options seems to be on the table, as described by Reuters.  Taking the database “private” would mean that consumer complaints – and the companies or individuals that are the subjects of those complaints – would be shielded from what Reuters termed “the public gaze.”  The potential shift from public to private setting would come after Mulvaney had questioned whether the complaints should be published.

Kraninger’s tenure comes roughly one decade after the CFPB was created, and as has been well documented, the agency has been both lauded and criticized – in the case of the latter by at least come Republicans who have said the CFPB is too powerful, and have curbed at least some of its powers.

One tenet that may shape future CFPB policy, as noted by the newswire, ties into “disparate impact” – a legal theory that seeks to determine whether some business practice cause harm to one group of people over another – for instance in cases where discriminatory lending may be in place.  Kraninger has said that the theory still is under review, as is the idea of whether disparate impact should underpin cases pursued by the CFPB.

“It’s controversial, but it need not be if we have a public discourse on what the lay of the land is, try to get the evidence in one conversation, and think of the next steps that are appropriate,” said Kraninger to Reuters.  In addition, the CFPB would continue to pursue “bad actors” who do not intend to follow laws, but added that such determinations are not a “black and white issue.”

Kraninger’s comments to the newswire come after she had said on Wednesday that the agency should focus on more than just handing out fines, stating at an event by the Bipartisan Policy Center that “all too often agencies tend to judge themselves by their outputs.  For example, how many complaints did they handle … how much money did they recover.  If we succeed in fostering a culture of compliance and preventing harm, we would expect the number of complaints and the number of meritorious complaints to decline.”  In other efforts, as detailed by the American Banker, the CFPB will offer a “savings boot camp” amid efforts to educate consumers about financial matters.  “Tackling emergency savings is a logical place to start,” she said. “The goal is to move the needle on the number of Americans in this country who can cover a financial shock like a $400 emergency.”

In terms of near term policies, the agency will release proposed rules tied to the Fair Debt Collection Act in the “coming weeks” with efforts aimed at better communicating debt collection practices.