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Kathy Kraninger, President Donald Trump’s pick to succeed Acting Director Mick Mulvaney as permanent director of the Consumer Financial Protection Bureau, will be questioned by the Senate Banking Committee on July 19.
Kranginger currently serves under Mulvaney in his other capacity as director of the Office of Management and Budget. Some of the most common criticisms during the hearing are likely to be her lack of financial services experience and scrutiny over the payday and title lending rule, which is currently under review.
“You begin with the assumption that her approach would be Mulvaney-like and that she’s going to take stances Mulvaney and the president want,” Justin Hosie, partner at Hudson Cook LLP, told Auto Finance News. Mulvaney has been criticized for his ties to the payday loan industry, but Kraninger may differ from him in ways that haven’t been exposed. “It’ll be interesting to see her testimony to find out how she thinks and might be different from Mulvaney,” Hosie added.
Mulvaney has long opposed the payday lending rule that was created by his predecessor Richard Cordray and has sought to eliminate an August 2019 compliance deadline set by the original rule. However, a Texas district judge denied the request on June 12.
“The rule, as written, really clobbers the [payday] industry,” Hosie said. Although the rule sounds reasonable, he said, it disregards the need for lenders to provide emergency loans. “To tell a consumer who has an emergency need, ‘You have to be able to pay your other bills or you don’t qualify,’ is pretty self-defeating,” he added.
Proponents of the rule argue that consumers need protections from payday lending, which can place consumers in a debt trap from which they are unable to escape.