What To Expect From a Kraninger CFPB

December 10, 2018 at 8:58 am Leave a comment

Image result for kathy kraningerWhat would Pete Townsend say? By a one vote margin, Kathy Kraninger was confirmed to be the next head of the CFPB. She takes the reigns from her former boss Mick Mulvaney. For what it’s worth, her selection means that the first two permanent directors of the bureau will be from Ohio.

She is now one of the most powerful people in America. She has a self-generating budget and, with no board to contend with, she can quickly and decisively move to both prosecute a wide range of businesses and shape the regulations they must abide by.

So what do we know about her at this point? Surprisingly little. To democrats she is an inexperienced bureaucrat who at the same time played a role in everything bad the Trump Administration has ever done. To republicans, she is a long time public servant whose experience as a congressional staffer and a high-ranking OMB official where she helped oversee funding for several agencies gives her the type of experience you need to run an agency in Washington. In addition, as a member of the Peace Corps her experience teaching in Russia taught her the dangers of over-regulated markets. The truth is no one knows for sure what to expect but a good place to start might be with her own words based on her written testimony before the Senate Banking  Committee.

First, she wants the Bureau to be “fair and transparent.” She wants to make sure that the Bureau undertakes robust cost benefit analysis and believes in the rule making process. Possible translation: you will continue to see fewer legal actions and more emphasis on using the regulatory process as the primary means of establishing the regulatory framework. Second, the Bureau will work closely with state and other federal regulators to police fraudulent activity. Possible translation: Bad conduct won’t be tolerated but there are instances where misconduct can be better handled by regulators with concurrent jurisdiction than it can be by the Bureau. Third, the Bureau has a profound obligation to protect sensitive information. It will clamp down on unnecessary data collection. Possible translation: the Bureau collects a tremendous amount of personal information. Its critics and even some of its supporters have suggested that it needs to place more emphasis on protecting this treasure trove of consumer data. This also could indirectly indicate that the Bureau will be taking a second and third look at newly amended regulations such as HMDA. Finally, she wants to make sure the Bureau is “accountable to the American people for its actions, including its expenditure of resources.” Possible translation: Does this mean she’s going to advocate for the CFPB to become subject to the Congressional Appropriations process? I doubt it. Funny thing about power, once you get it, it’s pretty difficult to give up.

By the way, one act of her predecessor that she may want to reconsider is his determination to rename the CFPB. According to a recent report, the name change will cost financial institutions $300 million. Think of all those forms you have that currently refer to the CFPB.

Vullo Out at DFS?

The Wall Street Journal reported on Thursday that the Cuomo Administration is seriously considering replacing Maria Vullo as the head of New York’s Department of Financial Services with his chief of staff, Linda Lacewell. Stay tuned.

Entry filed under: General, New York State, Regulatory. Tags: , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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