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VOL. 43 | NO. 10 | Friday, March 8, 2019

Consumer watchdog agency and its leadership under scrutiny

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WASHINGTON (AP) — The government's consumer watchdog agency came under new scrutiny from the House Financial Services Committee, now controlled by Democrats who say the appointees chosen by President Donald Trump to lead the organization have undermined its mission to protect Americans.

A fresh rebuke came Thursday from Rep. Maxine Waters, D-Calif., the chair of the committee, as the new head of the Consumer Financial Protection Bureau appeared before the committee.

In December Kathy Kraninger succeeded Mick Mulvaney, now Trump's acting chief of staff. Mulvaney hired Republican political operatives to oversee nearly all of the agency's operations.

"The Trump administration has undertaken a sustained effort to destroy the agency," Waters said. "I'm committed to reversing the damage that Mulvaney caused."

As a congressman from South Carolina, Mulvaney described the bureau as a "sick, sad" joke. When he was made director, Mulvaney pushed for cut backs on many of the rules and regulations that were put into place under the first director during the Obama administration, former Ohio attorney general Richard Cordray.

Democrats opposed Kraninger's appointment in the fall, saying she had little relevant experience.

Kraninger, who had worked as a mid-level official in the White House's budget office, most recently under Mulvaney, has no experience in financial services or consumer protection and had never run a federal agency.

The CFPB was created as an independent agency by the landmark Dodd-Frank law that overhauled the regulations governing Wall Street and banks in the wake of the 2008-09 financial crisis.

Republicans assailed the CFPB under Cordray, saying he had overreached in actions taken against companies selling financial products and services.

Consumer advocates expect Kraninger to run the agency as Mulvaney did. With the Democrats now in control of the House, however, oversight of the agency is intensifying.

Waters has proposed legislation that would direct Kraninger to reverse Mulvaney's actions as head of the CFPB in the areas of student loans, consumer complaints, fair lending rules and others. Waters' bill has gained several dozen Democratic supporters in the House.

Kraninger told the lawmakers Thursday that she's pushing broader efforts at the CFPB to prevent harm to consumers.

Kraninger insisted, under a shower of criticisms and questions from Democrats, that she is not under the political influence of Trump or Mulvaney.

"I absolutely take seriously the responsibility vested in me, and the decisions I take at the CFPB are my decisions," Kraninger said. Kraninger said she has never received a directive from Trump or felt pressure to act in a way that the president or other White House officials might like.

Republicans defended Kraninger, accusing Democrats of setting a contentious tone after they "berated and badgered" her.

"The good news is that it's a new day at the CFPB," said Rep. Patrick McHenry of North Carolina, the panel's top Republican. He decried "the ugly history of regulation by enforcement" under Cordray's leadership as "dangerous and destructive."

The CFPB has the authority to scrutinize virtually any business selling financial products and services: credit card companies, payday lenders, mortgage servicers, debt collectors, for-profit colleges, auto lenders and money-transfer agents.

Under Cordray, the agency pursued enforcement actions against an array of companies large and small, saying that it returned tens of billions of dollars to consumers harmed by illegal practices.

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