Kraninger – with a ‘grr’ – faces questions about payday lending rule, other issues in first hearing

Setting priorities for the federal consumer protection agency, including the tone for how it operates as an agency, are the tasks ahead for its new director, she told a congressional oversight hearing Thursday at the start of a four-hour hearing marked by partisan back-and-forth throughout.

Kathleen (“Kathy”) Kraninger, the director of the Consumer Financial Protection Bureau (CFPB), told the House Financial Services Committee that she expects to “emphasize stability, consistency, and transparency as hallmarks” as her administration of the bureau works to “mature the agency and institutionalize the many partnerships that are key to our success.”

Kraninger was facing her first oversight hearing before Congress as director of the bureau; she was sworn in for a five-year term in December.

Following her opening statement, however, Democrats and Republicans began peppering Kraninger with either concern about the course of the agency under the administration of appointees by President Donald Trump or about the agency’s actions under the administration of former Director Richard Cordray, appointed by President Barack Obama.

There were some themes, however. Democrats, in particular, zeroed in on the agency’s proposal to change its rule on payday lending, scheduled to take effect in August, and remove the provision requiring lenders to prove that a borrower can afford to repay the loan. Kraninger fended off the concerns, telling her questioners that that bureau would, essentially, let the regulatory process take its course. The proposal is out for comment for until May 15 (although a separate proposal, to delay the effective date for the mandatory underwriting provisions of the regulation to August 2020, closes for comments March 18).

There was some other news generated during the hearing. Kraninger told the committee:

  • CFPB is still culling through comments submitted through former Acting Director John (“Mick”) Mulvaney’s “requests for information” from last year. Overall, nearly 90,000 comments were submitted on 12 RFIs issued for comment. Three RFIs dominated the comments, generating 97% of the letters received. Those topics were: the agency’s supervisory program; public reporting practices related to consumer complaint information (for example, the bureau’s publication of the complaints on its website); and civil investigative demands (CIDs).
  • A new permanent director of the bureau’s office of servicemember affairs has been hired; Jim Ryan takes his seat in the office Monday, Kraninger said. He fills an office that has been vacant for 18 months.
  • The bureau is taking a close look at the section in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) dealing with unfair, deceptive or abusive acts and practices (UDAAP).
  • The CFPB director confirmed to the committee that her last name is pronounced with a hard “g” sound (and not the soft “j” sound), although she said she answers to either pronunciation.