On Wednesday, Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger delivered her first policy speech since succeeding Mick Mulvaney as head of the CFPB in December. Forecasting the Bureau’s agenda over the coming months, Kraninger promised that, among other things, the Bureau will publish within weeks proposed rules to implement the Fair Debt Collection Practices Act (FDCPA) and will convene a “symposium” on “clarifying the meaning of abusive acts or practices under Section 1031 of the Dodd-Frank Act.” Kraninger also focused her remarks on the four “tools” given by Congress to the Bureau to carry its mission – education, regulation, supervision, and enforcement.
Addressing education, Kraninger stated that “empowering consumers to help themselves, protect their own interests, and choose the financial products and services that best fit their needs is vital to preventing consumer harm and building financial well-being.” Focusing on improving consumer savings, Kraninger noted that in addition to the Bureau’s recently launched a “Start Small, Save Up” initiative, the Bureau will later this year launch a “savings boot camp” which will include a series of videos to educate consumers on good savings habits.
On regulation, Kraninger promised that the Bureau will focus on “articulating clear rules of the road for regulated entities that promote competition, increase transparency, and preserve fair markets for financial products and services.” Emphasizing that the “the best possible rules” come from the “the best possible process,” Kraninger promised that the Bureau will proceed “deliberately and transparently in its rulemakings.” Of particular, note, Kraninger stated that the Bureau will soon release proposed rules to implement the FDCPA, which was first enacted in 1977. Kraninger also promised that the Bureau would take seriously its “responsibility under the law to reduce unwarranted regulatory burden and to consider the impact of rulemaking on regulated entities and consumers.”
Turning to supervision, which she described as being “the heart of this agency,” Kraninger stated that the Bureau would be taking a “fresh look at the entire process” to ensure that the Bureau’s supervisory activities are used “as effectively and efficiently as possible to prevent consumer harm” and consistently across supervised entities. Kraninger emphasized the need for coordination among government entities that supervise financial institutions, noting that she recently assumed the chair of the Federal Financial Institutions Examination Council, a group of federal and state agencies that regulate financial institutions, and stated she planned to focus “on strengthening coordination and collaboration with our sister regulators who review the same or similar information at the same institutions, albeit for different reasons.”
Finally, Kraninger promised that the Bureau would continue to focus on enforcement in appropriate cases, stating her “emphatic” view that “enforcement is an essential tool Congress gave the Bureau – particularly because education, rulemaking, and supervision will not prevent every violation.” She spoke of the need to emphasize consumer education because enforcement actions cannot identify every bad actor. Ultimately, Kraninger said, “purposeful enforcement is about utilizing robust resources most effectively to focus on the right cases to reinforce clear rules of the road and prevent harm by making sure bad actors know they will be held to account.”
Kraninger also shared her thoughts on how the CFPB’s effectiveness should be measured – not by “outputs” such as the number of complaints handled, but instead by “how well we use all of our tools to prevent consumer harm.” To that end, she announced that the Bureau will convene a symposia series over the next year on a variety of topics relating to the Bureau’s mission, beginning with “clarifying the meaning of abusive acts or practices under Section 1031 of the Dodd-Frank Act” – clarity that financial institutions will welcome.