Allied Progress Presents the Top Three Whoppers from CFPB Director Kraninger’s House Hearing Today March 7, 2019

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Kraninger Raises Alarm Bells with Refusal to Agree the CFPB Should Exist At All

WASHINGTON, D.C. – Following CFPB Director Kathy Kraninger’s dodgy and dishonest performance today before the House Financial Services Committee where she failed to demonstrate how the Trump administration’s policies have been “putting consumers first”, consumer advocacy group Allied Progress highlighted the top three falsehoods she trafficked in today.

“Director Kraninger’s testimony today was either purposely misleading or willfully misinformed, either way she sounded more like an industry lobbyist than the people’s consumer advocate,”said Jeremy Funk, spokesman for Allied Progress. “Kraninger repeatedly refused to answer simple ‘yes or no’ questions like whether she will continue the “Mulvaney Discount”, the practice of letting companies caught engaging in rampant consumer abuse or discrimination off the hook with a $1 fine. But most alarming, Kraninger dodged a simple question whether she believes the CFPB should exist at all, which raises serious questions about her commitment to protecting consumers. If she doesn’t know why she’s there, maybe she should step aside for someone who appreciates why the CFPB was established and why it needs to be fully staffed and resourced today.” Funk continued, “But despite raising more questions than answers, there was one clear takeaway: Kraninger is more interested in protecting the profits of President Trump’s donor friends than doing her job of protecting consumers. Kraninger offered zero assurances she will turn the page on the Mulvaney playbook of stonewalling investigations and enforcement of scams and discrimination from big banks, predatory lenders, and other financial scammers. From false claims she has no authority to look out for military lenders ripping off our servicemembers despite a chorus of 33 attorneys general and legal experts confirming she does, and after the Cordary-era CFPB routinely conducted them with industry compliance – to her bizarre refusal to admit student borrowers carrying over $1.4 trillion in debt is a “crisis” when even for-profit school cheerleader Betsy DeVos does — to her false suggestions that the Cordray-era ability-to-repay standard for payday loans wasn’t based on sound evidence, the Misinformer-in-Chief must be very proud her performance today.”

This morning, Allied Progress launched a new digital ad “Trump’s Payday Payback” encouraging concerned consumers to submit a public comment against the Trump-Kraninger CFPB’s costly proposal to take away a critical consumer protection against the payday debt trap at www.KathyKraninger.com

AND NOW, THE TOP THREE KRANINGER WHOPPERS:

1)Kraninger replies “That’s largely what [the payday rule rollback proposal] is about”in response to misinformed assertion that the ability-to-repay standard was based on “insufficient evidence”

2)Kraninger replies “I do not” to question whether she believes current law gives the CFPB the authority to conduct military lender examinations

3)Kraninger claims calling the student loan debt crisis a “crisis” is a “loaded word”

RHETORIC: Cordray-era Ability-to-Repay Standard for Payday Loans Based on “Insufficient Evidence”

REALITY: The CFPB Spent Five Years Studying Data And Meeting With Stakeholders Before They Created Their Existing Rule.

“Current CFPB Director Kraninger has proposed to repeal the heart of the agency’s 2017 payday and car title loan rule, which generally requires that lenders determine a borrower’s ability to repay a loan before making it. This rule was the result of over five years of extensive CFPB research, analysis, and stakeholder input. For years, civil rights organizations, consumer advocates, faith groups, working families, and others across the country pushed for a rule to protect their communities from the destructive payday lending debt trap. This rule has represented a step forward in protecting the millions of people lenders intentionally trap in 300-plus percent interest loans. Compliance with the rule was to begin in August 2019.” [“Proposed Repeal of Payday Loan Rule: Overview & Initial Reaction,” Center for Responsible Lending, 02/14/19]

RHETORIC: CFPB Doesn’t Have Authority to Conduct Military Lending Examinations to Prevent Servicemembers Being Overcharged

REALITY: 33 Attorneys General, Legal Experts, And House Financial Services Committee Members Agree “There Is No Question” That The CFPB Has Supervisory Authority For Compliance With The Military Lending Act.

33 State Attorney Generals Have Called On The CFPB To Reconsider It’s Decision To Stop Monitoring For Military Lending Act Violations. “As the Consumer Financial Protection Bureau (CFPB) reportedly moves away from routine lender audits, 33 state attorneys general are asking the agency to reconsider. In August, the New York Times cited internal CFPB documents which revealed changes in the way the bureau monitors lenders for their adherence to the Military Lending Act. That law protects members of the armed forces from abusive lending practices. Since its founding, the CFPB has conducted routine audits for signs of predatory practices targeting military personnel. Documents cited by the Times suggested that the agency will now take action only when a military consumer makes a complaint, either on the CFPB website or by calling a hotline.” [Mark Huffman, “Attorneys General call for strict enforcement of the Military Lending Act,” Consumer Affairs, 10/25/18]

According To Members Of The House Financial Services Committee, “There Is No Question” That The CFPB Has Supervisory Authority Over Regulated Entities For Compliance With The Military Lending Act, “As Has Been Detailed By Legal Experts, And Underscored By Republican And Democratic Members Of Congress.” On December 14, 2018, Democratic members of the House Financial Services Committee, led by Rep. Maxine Waters (D-CA), sent a letter to CFPB Director Kathy Kraninger. They wrote, “We believe servicemembers and their families deserve to have their rights under federal law fully upheld through strong supervision and enforcement by federal regulators, including the Consumer Bureau. For this reason, Congress granted the Consumer Bureau broad supervisory authority to oversee a wide range of regulated entities, required the Consumer Bureau to establish an Office of Servicemember Affairs, and in 2013, amended the MLA to give the Consumer Bureau, along with other federal agencies that oversee other financial institutions, the authority to enforce the MLA. As has been detailed by legal experts, and underscored by Republican and Democratic Members of Congress, there is no question the Consumer Bureau has the authority and the responsibility to supervise its regulated entities for compliance with the MLA.” [Letter to Kathy Kraninger from Rep. Maxine Waters et al.,12/14/18]

The CFPB “Conduced [Sic] Supervisory Exams For Years” During The Obama Administration, Citing “Cited Its Authority Not Just Under The Dodd-Frank Act, But Also In Regulating ‘Unfair, Deceptive Or Abusive Acts Or Practices,’ Known As UDAAP.” “Last year, Mick Mulvaney, at the time the acting director of the CFPB, claimed that further legislation was needed for the CFPB to examine financial firms for MLA compliance. The Obama administration had conduced [sic] supervisory exams for years, and has long cited its authority not just under the Dodd-Frank Act, but also in regulating ‘unfair, deceptive or abusive acts or practices,’ known as UDAAP. Mulvaney, now the White House chief of staff, had argued Dodd-Frank did not specifically identify the MLA among the 19 statutes under the CFPB’s authority.” [Kate Berry, “CFPB’s Kraninger asks for ‘clear authority’ over military lending exams,” American Banker, 01/17/19]

“The bureau has always had enforcement authority over a range of lenders, including payday and installment lenders, but without supervisory authority, investigations can take longer and often are based on consumer complaints.”[Kate Berry, “CFPB’s Kraninger asks for ‘clear authority’ over military lending exams,” American Banker, 01/17/19]

RHETORIC: Calling It a Student Loan Debt Crisis in America is a “Loaded Word”

REALITY: U.S. Student Loan Debt Reached A Record High Of $1.465 Trillion By The End Of 2018, And Even Secretary Of Education Betsy DeVos Has Said There’s A Crisis.

A December 2018 Bloomberg Analysis of Student Loan Securitization Data Found That “U.S. Student Loan Debt Outstanding Reached A Record $1.456 Trillion Last Month. “U.S. student loan debt outstanding reached a record $1.465 trillion last month and one particular set of borrowers is having a hard time paying back their loans, according to a Bloomberg analysis of student loan securitization data. This debt is raising fiscal risks. ‘Over 90% of student loans are guaranteed by the U.S. Department of Education, meaning that if a recession causes a rise in youth unemployment and triggers mass defaults, this contingent liability could prove burdensome for the U.S. government budget,’ said Paul Della Guardia, economist at the Institute of International Finance in emailed comments. The record student debt level is more than double the $675 billion outstanding in June 2009 when the recession ended.” [Alexandre Tanzi, “U.S. Student Loan Debt Sets Record, Doubling Since Recession,” Bloomberg, 12/17/18]

As of March 2019, The CFPB Has Received Over 63,000 Complaints regarding student loans. As of March 7, 2019, the CFPB has 63,211 complaints about “student loans” in their complaint database. [“Student Loan” search in CFPB Consumer Complaint Database, accessed 03/07/19]

Betsy DeVos Has Publicly Said Student Loans Have Helped Create A Crisis.“At a training conference on Tuesday focused on the weeds of financial-aid policy, the U.S. education secretary, Betsy DeVos, spoke in broad and bombastic terms about what she called the ‘crisis in higher education.’ What’s that emergency? The nation’s $1.5 trillion in federal student-loan debt held by roughly 45 million borrowers.” [Chris Quintana, “DeVos Says Student Loans Have Created a Crisis. Hold On, Researchers Say,” The Chronicle of Higher Education, 11/27/18]

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