Since Kathleen Kraninger was confirmed as the Director of the Consumer Financial Protection Bureau (CFPB) on December 6, 2018, six enforcement actions have been publicly resolved. Those cases have involved various types of defendants, and have covered a broad range of conduct that allegedly violated federal consumer financial law. Individuals, a federally chartered savings association, an online lender, offshore and domestic payday lenders, and a jewelry retailer have all been subject to the CFPB’s enforcement powers under Director Kraninger.
In contrast, the CFPB only finalized 10 enforcement actions during the 13-month period that Acting Director Mick Mulvaney was at the helm of the Bureau. For purposes of our analysis, we categorize the CFPB’s consent order that was filed on December 6, 2018—the same day Director Kraninger was confirmed—as one that was finalized and signed off on under Acting Director Mulvaney’s tenure. We do acknowledge that Director Kraninger has only been in her role for a short period of time thus far, and much of the behind-the-scenes enforcement activity likely occurred prior to her arrival at the CFPB. However, Director Kraninger has been the final sign-off for the six cases resolved after her confirmation and reviewing the enforcement activity during her short tenure may provide a glimpse into future trends and philosophies.
When reviewing and comparing the enforcement activity under Acting Director Mulvaney and Director Kraninger, a few takeaways emerge:
- The CFPB appears to be resolving cases far more frequently under Director Kraninger than under Acting Director Mulvaney;
- One case involved a parallel investigation and settlement with the State of New York;
- The Bureau under Director Kraninger has imposed a total of $16.8 million in civil money penalties;
- Director Kraninger has shown a willingness to impose more severe civil money penalties than Acting Director Mulvaney;
- All cases finalized under Direct Kraninger have relied on the CFPB’s UDAAP authority; and
- The CFPB under Director Kraninger demonstrated a rare willingness to impose a civil money penalty based on a defendant’s inability to pay more.
Upcoming Webinar
If this is an area you would like to learn more about, we encourage you to join us for our “Enforcement Update” webinar, which is scheduled for Tuesday, March 26 from 11:30 a.m. to 12:30 p.m. CT. This webinar will focus on the enforcement activity during Director Kraninger’s time at the CFPB and will discuss our takeaways in depth. Click here to RSVP to the webinar. Webinar login information will be provided one day prior to the event.
This will be the second webinar in our Payment Systems Webinar Series, which will cover hot topics and common pitfalls for entities navigating the compliance challenges of this dynamic industry — from traditional products (e.g., credit cards, debit cards, prepaid cards, gift cards, Automated Clearing House transactions, rewards programs) to emerging technologies (e.g., mobile payments, mobile wallets, cryptocurrencies).