September 10, 2019

Kraninger unveils new CFPB effort to cut back on regulatory duplication

CFPB Director Kathy Kraninger offers insights into the bureau's approach to consumer protection. (Photo by Greg Dohler)

In her address to attendees at NAFCU's Congressional Caucus Monday, CFPB Director Kathy Kraninger announced that the bureau will be using four tools to improve processes. Notably, one of the tools Kraninger discussed acknowledges the need for regulatory clarity when it comes to supervision. Credit unions subject to CFPB and NCUA rules have said before that some examination processes are duplicative, reducing valuable credit union resources.

"As director, I intend to use each of [the tools Congress gave the bureau to protect consumers] at our disposal to carry out our mission, and the lens I've put on…is a focus on preventing harm to consumers," said Kraninger.

Kraninger explained in detail the bureau's use of the four tools:

  • Supervision: While only some credit unions are subject to the CFPB's oversight, the bureau is working with the NCUA and state regulators to take "a fresh look" at the entire examination process, Kraninger said. This collaboration is an effort to effectively address risk and take advantage of partnerships.
  • Education: "This is a truly important part of what we do because the bureau can't be with a consumer at every point of a transaction," Kraninger said. Through its financial literacy initiatives, the bureau is taking a consumer-centric approach to "give people control over their finances and the ability to absorb financial shocks," primarily by promoting savings. NAFCU recently hosted a webinar with bureau representatives and credit unions on a new initiative – "Start Small, Save Up."
  • Rulemaking and guidance: Kraninger said the bureau is focused on complying with its statutory obligations and preventing consumer harm, and is also working to reduce burdens on financial institutions with extended comment periods and informal guidance. She commented specifically on the bureau's advance notice of proposed rulemaking on the government-sponsored enterprise (GSE) qualified mortgage (QM) patch and its collection of data under the Home Mortgage Disclosure Act (HMDA).
  • Enforcement: Under this tool, Kraninger said the bureau "recognizes there are bad actors in this space" and uses its enforcement actions to maintain a level playing field and help consumers safely navigate the financial services marketplace.

Kraninger, who has led the bureau since December, stressed the importance of the CFPB's communication with credit unions – through direct comments and the Credit Union Advisory Council – given the close relationship with members.

She also reminded attendees about the bureau's symposium series – the first one focused on defining the abusive prong of the unfair, deceptive or abusive acts or practices (UDAAP) provision and the second one, scheduled for Sept. 19, will focus on behavioral law and economics.

NAFCU's Congressional Caucus continues through tomorrow. See today's lineup of speakers and get updates through NAFCU Today or #NAFCUCaucus on Twitter.