Twenty-three Democratic members of the House Financial Services Committee have sent a letter to Kathy Kraninger, the CFPB’s new Director, urging the Bureau to resume examining its supervised entities for compliance with the Military Lending Act (MLA). The Democrats signing the letter include Maxine Waters, currently the Ranking Member, who is expected to become Committee Chairman next month.
The letter cites reports that former Acting Director Mick Mulvaney was planning to eliminate routine supervisory examinations of creditors for MLA violations because the CFPB lacks statutory authority to conduct such examinations. Thirty state attorneys general, joined by the AGs of the District of Columbia, Puerto Rico, and the Virgin Islands, and all 49 Democratic Senators had previously sent letters to Mr. Mulvaney urging him to reconsider his plans to eliminate MLA examinations. As did the AGs and Senators, the House Members take the position that the CFPB has statutory authority to conduct such examinations. For the reasons set forth in our prior blog posts, we think this position is based on a misreading of the Bureau’s supervisory authority under the CFPA.
Whether the Bureau should resume MLA examinations is among the many decisions that Ms. Kraninger will face early in her tenure as Director. With Democrats assuming control of the House next month, the pressure on her to do so is likely to intensify.