Warren hammers CFPB director over consumer complaints: ‘You should resign’

Sen. Elizabeth Warren (D-Mass.) called for the director of the Consumer Financial Protection Bureau (CFPB) to resign over her handling of the response to the coronavirus pandemic.

The progressive senator claimed the director’s response is hurting consumers and giving companies a “get out of jail free card” against consumer protections under law. 

“Your leadership has been a miserable failure based on your actions in this pandemic. You should resign,” Warren told CFPB director Kathy Kraninger on Wednesday during a Senate Banking Committee hearing. 

.@SenWarren to @CFPBDirector: “Your leadership has been a miserable failure based on your actions in this pandemic. You should resign.” pic.twitter.com/mlGnpCOEj5

— CSPAN (@cspan) July 29, 2020

Warren, who helped establish the CFPB 10 years ago during the Obama administration, noted the record numbers of complaints filed by consumers during recent months amid the coronavirus pandemic. 

In March, the CFPB issued a guidance announcing that it would be providing “needed flexibility to enable financial companies to work with customers in need as they respond to the COVID-19 pandemic.” 

The CFBP is responsible for enforcing the home Mortgage Disclosure ACT, which requires banks and mortgage lenders to provide data on who they give mortgages to and on what terms. The mortgage lenders are supposed to report that information quarterly, but the CFPB’s guidance in March gave more leeway to companies to delay reporting such information due to the pandemic. 

“When conducting examinations and other supervisory activities and in determining whether to take enforcement action, the Bureau will consider the circumstances that entities may face as a result of the COVID-19 pandemic and will be sensitive to good-faith efforts demonstrably designed to assist consumers,” the CFBP stated, according to the March guidance. 

Warren said the CFPB’s guidance issued to mortgage servicer companies is allowing the companies to break the law and harm consumers. 

“Instead of enforcing those rules, you issue guidelines to tell servicers that so long as they act ‘in good faith’ the bureau won’t step in if they break the law,” Warren said. 

“Director Kraninger, can you give me other examples of when law enforcement says, for example to a thief, that ‘as long as you claim you’re in good faith, you’re not going to be held responsible when you break the law?’” Warren asked. 

The director denied Warren’s description of the guidance. She added that “discretion” plays a role with respect to cases law enforcement takes on. 

“The guidance specifically says the rules that are written into law will not be enforced so long as the mortgage servicer claims that it’s in good faith, and I’m just asking because I know of nowhere else that guidances like that are put out,” Warren responded. “If Congress had wanted to write into law a good-faith exception, we certainly could have done that. But we didn’t do it.”

Warren similarly slammed Kraninger over guidance the bureau issued for credit reporting companies. 

“Director Kraninger, you told the credit reporting companies they didn’t need to bother complying with the law when a consumer disputes something on a credit report. So why do you think your job is to write the rules to allow credit reporting companies to break the law?” Warren asked. 

“I also would say that is false,” Kraninger responded. 

The director said that in regard to dispute resolutions, “it needs to be done” but it is difficult to resolve a dispute if a small business that could be the subject of the conflict is closed and the credit reporting agency can’t reach them.

Warren responded that the guidance as written is not limited to small businesses.