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Should CFPB Reorganize ‘Just Weeks Before an Election’?

GSE loansU.S. Sen. Sherrod Brown (D-Ohio), the ranking member of the Senate Committee on Banking, Housing, and Urban Affairs, has called on Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger to delay the proposed reorganization of the agency’s Division of Supervision, Enforcement, and Fair Lending (SEFL) until after the election while raising questions on whether she would continue as the agency’s chief in a new administration.

In a letter to Kraninger, Brown suggested that Kraninger’s job was at risk if she pursued her plans, claiming that a “reorganization of this magnitude is inappropriate just weeks before an election that will determine whether you continue as Director past January 20, 2021.”

Kraninger was confirmed as the CFPB Director in December 2018 and her job is a five-year term. However, the U.S. Supreme Court ruled earlier this year that the President has the ability to fire the CFPB director at will. With Kraninger having been appointed by President Trump, Brown’s comments could be read as an insinuation that her tenure could be reconsidered under a Joe Biden administration.

Brown proposed that Kraninger “not move forward with the SEFL reorganization until it is clear” her job was secure. He also requested that she cede communications with his office on the subject to Brian Schneider, the CFPB’s Associate Director for the SEFL Division, and Thomas Ward, the Director of Enforcement.

In his letter, Brown referred to an earlier call he had with Kraninger in which he shared “concerns that the SEFL reorganization will weaken the Bureau’s ability to hold financial institutions accountable for violating the law and obtain redress for harmed consumers.” He contradicted Kraninger’s alleged response that the reorganization would enable the agency’s Office of Enforcement (Enforcement) with additional technical resources and reporting capabilities, claiming that CFPB documentation did not support that claim.

“According to the Bureau’s documents you provided me, the claimed objective of the SEFL reorganization is to allow for ‘centralization and streamlining’ and ‘establishment of a consistent and unified SEFL approach to policy and strategic planning,’” Brown wrote. “While these objectives may have merit, how they are achieved matters. Here, to the extent the reorganization achieves any desired consistency or efficiency, it is by cutting out Enforcement’s voice and role in critical SEFL decision making processes. It also introduces inefficiency and confusion by taking dedicated Enforcement resources, such as the E-Litigation team, and asking them to do non-Enforcement work and report to a new SEFL-wide office.”

Kraninger has not yet publicly commented on Brown’s letter.

About Author: Phil Hall

Phil Hall is a former United Nations-based reporter for Fairchild Broadcast News, the author of nine books, the host of the award-winning SoundCloud podcast "The Online Movie Show," co-host of the award-winning WAPJ-FM talk show "Nutmeg Chatter" and a writer with credits in The New York Times, New York Daily News, Hartford Courant, Wired, The Hill's Congress Blog and Profit Confidential. His real estate finance writing has been published in the ABA Banking Journal, Secondary Marketing Executive, Servicing Management, MortgageOrb, Progress in Lending, National Mortgage Professional, Mortgage Professional America, Canadian Mortgage Professional, Mortgage Professional News, Mortgage Broker News and HousingWire.
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