Kraninger Sworn in at CFPB as Waters Decries Weakened Enforcement

After her confirmation last week in the United States Senate, Kathleen L. Kraninger was sworn in as the new, full-time director of the Consumer Financial Protection Bureau (CFPB) on Monday afternoon. She made her “media debut” on Tuesday, answering questions from the press on her first full day on the job. Meanwhile, California Congresswoman Maxine Waters (D-CA) – currently the ranking member of the Republican-controlled House Financial Services Committee – has been nominated to the position of committee chair when Democrats take control of the House in January, 2019.

Following her nomination Monday evening to the role of committee chair by the Democratic Steering and Policy Committee, Waters issued a statement looking forward to driving a new agenda in the 116th Congress.

“As Chairwoman, I will continue to prioritize protecting consumers and investors from abusive financial practices, ensuring strong safeguards are in place to prevent another financial crisis, expanding and supporting affordable housing opportunities, encouraging responsible innovation in financial technology, promoting diversity and inclusion in the financial services sector and ensuring that hard working Americans and small businesses have fair access to the financial system and opportunities to thrive,” she said.


Prior to Director Kraninger’s first media session, House Democrats on the Financial Services committee issued another statement from Waters which condemned a CFPB proposal for a “no-action letter” policy to reduce enforcement, one of the final proposals of acting director Mick Mulvaney’s leadership of the agency.

“This is yet another step to weaken the Consumer Bureau and curtail its enforcement tools,” Waters said.

Tuesday afternoon, Kraninger took the podium at the CFPB offices in Washington, D.C. to answer questions from the press, and expressed a desire to work with members of Congress. Kraninger also commented on Rep. Waters’ statement of condemnation on the “no-action letter” policy proposal, as well as a question asking how she would respond to potential requests to testify before the Democratic-led Financial Services Committee.

“I absolutely look forward to talking with Congresswoman Waters,” Kraninger began. “I want to have a productive relationship with Congress. I think they’re a critical stakeholder, I’ve served many members of Congress in my career, and I think it’s an important part of a federal agency’s responsiveness to the American people. They’re the representatives of the American people, and we should be held accountable.”

Kraninger also revealed that she hopes to meet with Waters imminently. She also said that she will speak at some point with inaugural CFPB director Richard Cordray. “In just about every job that I’ve had, I’ve talked to my predecessors,” she said. “So, I expect that to happen.”

Written by Chris Clow

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  • According to the most recent HUD OIG management report, HUD needs to clean up its act not only on servicing but also HECMs, in particular. The losses got out of hand until fiscal 2014 when the impact of the September 30, 2013 changes was first felt. Then in an unfortunate act, HUD listed to HECM lenders and rather than making them create their own version of financial assessment, HUD did it for them.

    Since fiscal 2014, as the percentage of HECMs undergoing financial assessment rose, so did the average loss in the MMIF per HECM endorsed in each new fiscal year. Fiscal 2017 proved to be the worst year in the history of the HECM being in the MMIF for the average loss generated by each endorsed in that fiscal year. On October 2, 2017, HUD tried to mitigate those losses by introducing restructuring of the initial MIP and lowering PLFs. The changes proved to reduce the average loss per endorsed HECM during fiscal 2018. That was a modest step forward.

    Then questionably HUD seemed unwilling to build on the changes made on 10/2/2017 due to the concerns of the lenders. So now in a move that HUD shows little confidence in by instituting its first one year sunset provision on the HECM changes mandated in a HECM Mortgagee Letter as found in Mortgagee Letter 2018-06, HUD has decided on a contingent second appraisal requirement. It is all but certain that this will not be nearly as effective as further reducing PLFs which is an option for HUD for fiscal 2020.

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