Consumer Financial Protection Bureau (CFPB) Director Kathleen Kraninger indicated to lawmakers at a Senate Banking Committee hearing last week that enforcement actions in 2020 are expected to increase from their current levels by the end of the fiscal year, according to testimony provided by the director herself.
Sitting as the primary witness in a hearing serving as part of the Bureau’s semi-annual report to Congress, Kraninger was asked about fair lending practices and jurisdiction over auto lending, respectively, by Senators Sherrod Brown (D-Ohio) and Jon Tester (D-Mont.), particularly considering that Kraninger’s leadership of the Bureau has seen less enforcement actions issued when directly compared with her full-time predecessor, Richard Cordray.
In response to questions related to the number of recorded enforcement actions taken by the Bureau and its practices related to fair lending complaints, Kraninger responded that her expectation of enforcement for fiscal year 2020 is higher than was observed one year prior.
“Last year, [the CFPB recorded] 22 public enforcement actions, and I expect that that number at the end of this fiscal year will be notably higher,” Kraninger told the senators. “We continue to work our way through appropriate enforcement actions.”
The number of investigations related to potential enforcement was also higher, Kraninger said, but she would not disclose either a specific number, or a percentage-based rise in the number of investigations citing concerns over the confidentiality of the Bureau’s data.
Recently, the CFPB recorded its first enforcement action against a non-bank mortgage lender and broker, alleging that the organization participated in “redlining” in metropolitan Chicago neighborhoods, meaning that the lender allegedly discouraged prospective applicants from applying for mortgage loans on the basis of race.
The newfound posture related to a non-depository lender has the potential to affect the reverse mortgage industry, which would likely be well-served by heavily scrutinizing marketing practices as well as marketing materials, particularly as the demographic served by reverse mortgages will only spend more time in online arenas as time goes on, according to a legal professional interviewed by RMD.
Director Kraninger ascended to her position at the head of the agency in late 2018 after being nominated to the post by President Donald Trump. Recently, Kraninger expressed support for a Supreme Court challenge to the single director structure of the agency she leads as unconstitutional. The Court ruled in June that it agreed, though stopped short of invalidating the agency at-large.