On December 11, 2018 Kathleen Kraninger, the new Director of the Bureau of Consumer Financial Protection, held a media conference. She introduced herself and answered media questions. Subsequent headlines have focused on among other things: (a) whether she would simply follow the recent course set by her predecessor Acting Director Mick Mulvaney, and (b) whether the Bureau’s recent name change would stick. Director Kraninger’s comments appeared to signal accountability, independence and curiosity. The impact on regulated institutions in 2019 and beyond remains to unfold. Here are some developments to watch in 2019.
Listening Tour 2019. Kraninger will be engaging in a listening tour to get to know the 1500 employees in the Bureau. For example, she plans to visit to San Francisco, Chicago, New York regional offices. She also indicated that she intends to connect with other regulators and constituencies including, state regulators, other related federal agencies, consumer advocates and regulated institutions. She also indicated she will work to have a productive relationship with House Financial Services Committee and its incoming chair Maxine Waters. Earlier this month, Waters released a statement requesting Kraninger undertake specific initiatives “to put consumers first by rolling back the anti-consumer actions taken by her predecessor and allowing the Consumer Bureau to resume its work of protecting hardworking Americans from unfair, deceptive or abusive practices.” New staffing alignments and other strategic changes may be borne form this listening tour.
Believes Regulated Industry Wants to Comply. In a nod to industry, Kraninger noted that institutions want to comply with consumer protection laws. The Bureau needs to give institutions clear rules in her view. However, she also signaled strong action for outliers, indicating that enforcement is a critical function and tool of the Bureau “fundamental to the agency’s mission.” She also noted that “bad actors” should expect repercussions under her watch.
The Name Game. Kraninger indicated at the December 11 press conference that she would be looking into the issue, and that she understands concerns regarding consumer confusion, brand identity and expense. She noted, however, that she “care[s] more about what the agency does that what it is called.” On December 17, Senator Elizabeth Warren has demanded the opening of an investigation into the Bureau’s name and costs the change is imposing on institutions and the taxpayers. Apparently in response and despite no official announcement being posted to the CFPB site, Kraninger reportedly announced internally that all rebranding name change efforts have been ceased.
Bureau Priorities. Kraninger mentioned one specific priority: data protection and privacy, specifically “what is collected, how it is used, and what information is appropriately shared.” Otherwise, it appears that Kraninger, at least for now, will continue to operate under the existing stated Bureau regulatory agenda. Enumerated rule making priorities for the short term 2019 include the following:
- Prerule Stage: Threshold Adjustment to Escrow Provision for Higher Priced Mortgage Loans. Property Assessed Clean Energy Loans. Public Release of Home Mortgage Disclosure Act Data.
- Proposed Rule Stage: The Expedited Funds Availability Act (Regulation CC). Debt Collection Rule. Civil Penalty Inflation Adjustment Rule. Payday, Vehicle Title, and Certain High-Cost Installment Loans. Partial Exemptions from the Requirements of the Home Mortgage Disclosure Act under the Economic Growth, Regulatory Relief, and Consumer Protection Act (Regulation C).
- Final Rule Stage: Disclosure of Records and Information. Summaries of Rights under the Fair Credit Reporting Act (Regulation V). Technical Specifications for Submissions to the Prepaid Account Agreements Database.
We also should expect further developments with the implementation of the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA). And Kraninger and the Bureau undoubtedly will be monitoring future developments on consumer protection legislative front. Especially, potential progress of the Consumers First Act, H.R. 6972 introduced this Fall by Rep. Waters and others). In addition to future public statements and any early public enforcement actions, Kraninger likely may make her first mark when the revamped regulatory priorities are issued in the Spring 2019 Agenda. In the interim, we should keep watching for signals regarding Kraninger’s priorities and style, as she navigates the challenging environment and strikes her own balance in shaping the Bureau going forward.