Exclusive: New U.S. consumer watchdog chief to continue review of complaints database, fair lendingApril 18, 2019
WASHINGTON (Reuters) – The new director of the Consumer Financial Protection Bureau will continue with reviews, begun by her predecessor, of its public complaints database and how the agency enforces discriminatory lending laws, she told Reuters.
FILE PHOTO: Kathy Kraninger speaks to an audience on her first set of regulatory priorities as director of the Consumer Financial Protection Bureau in Washington, U.S., April 17, 2019. REUTERS/Katanga Johnson
Speaking to Reuters in her first interview since taking office in December, Kathy Kraninger said the agency was discussing how the public complaints database, a key source of the bureau’s investigations, should operate.
“It is on the agenda this year to address what is the public kind of discussion about what the database should be,” she said on Wednesday.
The financial industry and consumer advocates have been watching closely to see whether Kraninger would continue with a number of controversial projects begun by Mick Mulvaney, formerly the agency’s interim director and now President Donald Trump’s chief of staff.
Kraninger acknowledged the database, which went public in 2012 to boost transparency of consumer issues, supported the bureau’s mission to protect borrowers, but did not rule out making it private.
Shielding the complaints from the public gaze would mark a major win for the industry, which has lobbied against being publicly named and shamed. However, it would spark opposition from consumer advocates and Democrats who say keeping it public encourages companies to address customer complaints.
Mulvaney, who worked with Kraninger in her previous role at the Office of Management and Budget, had questioned the policy of publishing the complaints.
Kraninger’s comments suggest she may continue with Mulvaney’s efforts to curtail the bureau’s powers, after the administration of President Barack Obama built it into a powerful watchdog.
Created in the wake of the 2008 financial crisis to crack down on predatory lenders, the CFPB sits at the heart of a battle between Democrats and Republicans over the future of consumer financial protections under the business-friendly Trump administration.
Republicans have argued since its creation that the agency was given too much power and was unaccountable. They set about overhauling the agency after taking it over in November 2017, including rolling back rules and reducing enforcement actions.
Democratic lawmakers have accused the administration of bowing to industry lobbyists and warn the changes could sow the seeds of the next financial crisis.
Mulvaney had also begun a review of whether the agency should continue to apply a legal tool known as “disparate impact” when enforcing laws that guard against discriminatory lending.
Disparate impact refers to a legal theory that allows regulators to prosecute practices that adversely affect one group of people compared with others, though the rules applied may on their face be…