Enforcement actions plummet under Trump appointees

Enforcement actions at the Consumer Financial Protection Bureau have dropped precipitously during the first three months of Director Kathy Kraninger’s tenure, according to a report from the Consumer Federation of America.

Enforcement actions at the Consumer Financial Protection Bureau have dropped precipitously during the first three months of Director Kathy Kraninger’s tenure, according to a report from the Consumer Federation of America.

The results aren’t surprising, given the pared back approach to consumer protection under Mick Mulvaney, who served as interim director of the bureau from November 2017 to December 2018. Although Kraninger has only been at the helm since December, she shows signs of continuing the approach of her former boss at the Office of Management and Budget.

Under previous director Richard Cordray, the CFPB filed 55 enforcement actions in 2015; that number was 11 in 2018, largely under Mulvaney.

This is the case even in the areas where consumer complaint activity is the highest. The bureau has filed two cases each over credit reporting and mortgage lending issues, which accounted for 37 percent (121,000) and 10 percent (32,900) of consumer complaints from Oct. 1, 2017-Sep. 30, 2018. The CFPB also announced one case related to debt collection, which accounted for a quarter of complaints (82,250).

There have been no cases related to student lending or anti-discrimination. In contrast, there were 11 cases enforcing the Equal Credit Opportunity Act under Cordray producing average consumer relief over $56 million per case and there were 15 student lending related cases with an average of $47.5 million in consumer relief per case.

The CFPB announced 116 enforcement cases against consumer finance companies that used in deceptive or misleading practices producing average consumer relief of over $94 million per case. Kraninger has announced three such cases, none of which resulted in monetary restitution to consumers.

Monetary restitution has also decreased significantly, including a number of recent cases in which no monetary restitution was levied. Under Cordray, an average of $43 million in restitution was returned to consumers each week; under Mulvaney that number was $6.4 million. During Kraninger’s first three months, it slipped to $925,000 per week.

Two cases enforcing the Fair Credit Reporting Act and one enforcing the Fair Debt Collection Practices Act were settled with no monetary restitution under Kraninger.

The CFA study identifies and classifies every public enforcement action since the inception of the CFPB through the first three months of Kraninger’s time at the bureau.

“It is simply unacceptable for a consumer protection agency to turn its back on consumers that have been harmed by their financial institution’s deceit,” said Christopher Peterson, CFA’s director of financial services and author of the report. “Consumers have a right to expect that the federal government will enforce our consumer protection laws.”

Kraninger, who vowed in her confirmation hearing that the bureau would “take aggressive action against bad actors who break the rules by engaging in fraud and other illegal activity” under her leadership, faced the Senate Banking Committee on Tuesday to present the bureau’s semi-annual report to Congress.

Sen. Elizabeth Warren (D-Mass.), a driving force behind creation of the CFPB in 2010, was not impressed by Kraninger’s performance so far.

“It seems pretty clear to me that you stopped enforcing the laws designed to protect consumers,” Warren said. “You are supposed to be the cop on the beat, but you are only watching out for the crooks who are cheating American consumers. If you had any decency, you’d either do your job or resign.”