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Committee Staff Report Documents Trump-Appointees' Efforts to Leave Consumers High and Dry

Washington, October 16, 2019
Tags: CFPB

Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the Committee on Financial Services, released a Majority staff report entitled, “Settling for Nothing: How Kraninger’s CFPB Leaves Consumers High and Dry.”

According to the report, Trump-appointed leadership, including Director Kathleen Kraninger, have failed consumers by undermining the Consumer Financial Protection Bureau’s (Consumer Bureau or CFPB) previously robust policing of misconduct in the financial sector.

The report presents evidence that the Trump Administration’s politicization of the Consumer Bureau has led to a decline in the Consumer Bureau’s redress for harmed consumers.

“It is unacceptable that Trump Administration political appointees are intervening to prevent consumers from getting their money back after they’ve been the victim of predatory financial institutions,” said Chairwoman Waters. “After several settlements that failed to compensate harmed consumers, I directed my staff to open an investigation to find out why bad actors were being prioritized over consumers. This report is only the beginning of the Committee’s efforts to investigate wrongdoing, and as Chairwoman of the Committee, I will continue my efforts to put consumers first.”

In February 2019, the House Financial Services Committee’s Majority staff opened this investigation to examine how and why the Consumer Bureau, under Trump-appointed leadership, failed to seek consumer relief in certain cases. After reviewing thousands of pages of internal Consumer Bureau documents, the Committee’s Majority staff issued the following findings and conclusions:

Majority Staff Findings:

  • Eric Blankenstein, a Trump-Administration political appointee most well-known for his history of writing racist blog posts, overruled career enforcement attorneys and non-partisan senior management officials’ recommendations to require Enova International, Inc., to refund the millions of dollars it had illegally taken from consumers’ accounts.
  • Trump-appointed Consumer Bureau leadership played a key role in preventing consumers harmed by Sterling Jewelers, Inc’s unlawful conduct from receiving restitution, despite staff recommendations that Sterling should pay redress to consumers.
  • Since the House Financial Services Committee commenced its investigation in February 2019, the Consumer Bureau, under Director Kathy Kraninger, has approved additional settlements that appear to shortchange harmed consumers.

Majority Staff Conclusions:

  • Under Obama-appointed leadership, the Consumer Bureau held entities accountable when they violated the law. Trump-appointed leadership has installed political appointees to oversee the Consumer Bureau’s career senior managers. Under the watch of these political appointees, the Consumer Bureau’s enforcement activity has decreased dramatically.
  • To ensure that the Consumer Bureau fulfills its mission as an independent agency tasked with enforcing federal consumer financial law and protecting consumers, Congress should take action to reverse the politicization of the Consumer Bureau.
  • The House Financial Services Committee should consider ways to strengthen the provisions in the Consumer Financial Protection Act of 2010 (CFPA), which authorizes the Consumer Bureau to investigate potential violations of federal consumer financial law and seek relief for consumers through enforcement actions.

To read the full report, click here.

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