CFPB Director Kathleen L. Kraninger appeared Before the Senate Committee on Banking, Housing, and Urban Affairs on July 29 to deliver the Bureau’s most recent Semi-Annual Report to Congress. This report was particularly interesting given the hearing’s focus on Fair Lending. In ranking member Sherrod Brown’s opening remarks he stated:
The CFPB has the tools, the resources, and a legal requirement to root out discrimination in lending and protect communities of color from shady financial products that strip away their wealth. Under Director Cordray, the Bureau wielded these tools to hold banks, credit card companies, and other corporations accountable when they engaged in illegal discrimination, returning more than $500 million to Black, Latinx, and Asian Americans. Under Director Kraninger and Acting Director Mulvaney, the Consumer Bureau did not bring a single case of illegal discrimination for more than two-and-a-half years.
Expecting the Senate Committee to focus on fair lending, Director Kraninger published a blog post the day prior to the hearings summarizing the Bureau’s activity in fair lending. This blog post included the following in her prepared statement:
As a result of the Bureau’s efforts to fulfill its fair lending mission in this reporting period, the Bureau’s Fair Lending Supervision program initiated 14 supervisory events at financial services institutions under the Bureau’s jurisdiction to determine compliance with federal laws intended to ensure the fair, equitable, and nondiscriminatory access to credit for both individuals and communities, including the ECOA and HMDA. In the current reporting period, the Bureau issued more matters requiring attention (MRAs) or memoranda of understanding (MOUs) than in the prior period.
After the opening statements, Senator’s Brown and Senator John Tester pressed Director Kraninger on fair lending issues and the volume of enforcement activity since she took the helm of the CFPB, as well as the dollar amounts returned to borrowers for violations related to auto lending. Director Kraninger responded that “last year we had 22 public enforcement actions and I expect that that number at the end of this fiscal year will be notably higher. We continue to work our way through appropriate enforcement actions”
While it is widely acknowledged that a change in administration come November would result in a return to a Director Cordray era approach to supervision and enforcement, it is revealing to see Director Kraninger both acknowledge the volume of the Bureau’s enforcement and supervision activity and indicate such action would be rising through the end of the year. While supervised entities have enjoyed a period of decreased enforcement activity from the Bureau relating to fair lending, these comments by Director Kraninger indicate that time may be coming to an end.