CFPB chief must pick a side: Consumers or scammersJune 11, 2019
Thanks to the work of the Consumer Financial Protection Bureau (CFPB), Shirley Banks of Greenville, Miss. received a $1,000 check in the mail in 2016.
Hundreds of thousands of other people got help from the CFPB, too. But today’s leadership of this vital agency is demonstrating how government can abandon the goals Congress set out for it, and betray the people it should protect.
Kathleen Kraninger, who has helmed CFPB for a scant four months, is unfortunately already making a name for herself as someone willing to let the bad guys off the hook. She is a protégé of Mick MulvaneyJohn (Mick) Michael MulvaneySenate GOP, White House to meet on avoiding October shutdown Senate GOP, White House to meet on avoiding October shutdown Republicans warn Cuccinelli won’t get confirmed by GOP Senate MORE, who spent much of 2018 doing his best to lay waste to the CFPB’s work and structure as its acting director.
In late January, Kraninger signed off on a settlement with loan broker Mark Corbett for defrauding veterans. Corbett misled ex-servicemembers into signing contracts with questionable interest rates and repeatedly lied to them to gain direct access to their hard-earned pension payments.
Kraninger also recently approved a settlement against online payday lender Enova International Inc., which had illegally debited funds from customer accounts without permission.
Neither settlement offered refunds or restitution for wronged consumers and imposed limited monetary penalties, making it easier for companies to treat CFPB settlements as mere slaps on the wrist that come with doing business.
As noted in a recent report by the Consumer Federation of America, Kraninger so far has settled almost every deceptive practices case without providing a single dollar of compensation for harmed families. Call it the “Kraninger Discount.”
Banks is a former customer of Morgan Drexen, a company that promised to help manage consumers’ debt but in reality charged explicitly prohibited fees and lied to customers about its services. Banks lost about $1,000 in her dealings with Morgan Drexen and shared the details of her bitter experience with the CFPB.
In 2013, the CFPB filed a lawsuit against Morgan Drexen, and contacted Banks to hear her story, which the agency documented for the court.
After three years of litigation, the CFPB won its case, and the court ordered Morgan Drexen to pay $132 million in restitution to consumers. Banks received her money back.
From 2011 to 2017, under the leadership of its former director, Richard CordrayRichard Adams CordrayKraninger’s CFPB gives consumers the tools to help themselves Kraninger’s CFPB gives consumers the tools to help themselves House rebukes Mulvaney’s efforts to rein in consumer bureau MORE, the CFPB used its powers on behalf of everyday consumers like Shirley Banks. It imposed fair rules of the road for credit and prepaid cards, mortgages and more, reining in the worst abuses and lawbreaking conduct.