Consumer advocates criticized Ms. Kraninger’s invitation to financial companies. “Americans don’t need the main federal consumer protection agency partnering with the financial services industry to conduct studies,” said Linda Jun, senior policy counsel at Americans for Financial Reform. “Americans need a strong CFPB that actually polices the industry from doing harm.”
Marcus Stanley, policy director at Americans for Financial Reform, said that there is a widespread feeling that the MSRB is dominated by insiders to a degree that is “greater than is healthy for a self regulatory organization. Reforms are called for and I’m glad that Sen. Kennedy is stepping forward to do that.”
He said he sees bipartisan interest in the bill because people have interest in federal regulation in the municipal markets.
“We’ve seen blowups in the muni markets that have really affected cities and public entities across the country,” Stanley said, referencing Detroit and Puerto Rico.
“We are deeply concerned that the reductions in resolution planning requirements proposed here would have an adverse effect on the financial stability of the United States and possibly also on the safety and soundness of individual banks,” Americans for Financial Reform said in its letter.
“Loosening this regulation is a straight-up giveaway to the biggest Wall Street banks whose high-risk trading activities got us all into deep trouble in 2008,” Carter Dougherty, a spokesperson for Americans for Financial Reform, told Sludge. “This rule is critical for protecting bank affiliates that handle customer deposits.”
Kathleen Kraninger, who has helmed CFPB for a scant four months, is unfortunately already making a name for herself as someone willing to let the bad guys off the hook. She is a protégé of Mick Mulvaney, who spent much of 2018 doing his best to lay waste to the CFPB’s work and structure as its acting director.
Trump-appointed regulators came into office saying they would pare back Wall Street’s postcrisis rulebook. More than two years into the administration’s tenure, most of the work remains unfinished, particularly for the biggest banks.
Teaching students how to manage their money has become mandatory in many K-12 classrooms. But can it substitute for real enforcement of financial fraud?
As part of a larger package, the Securities and Exchange Commission this week adopted the new “Regulation Best Interest,” which requires that stock broker/dealers act in their customers’ “best interest,” a term that is not defined.
“By calling this Regulation Best Interest, (Chairman) Jay Clayton and the SEC have gone full Orwell on us,” Dougherty said. “This regulation does not require your broker to act in your best interest the way a doctor or lawyer does. You still need to treat your broker as a used-car salesman who might pull a fast one on you.”
AFR In The News: The Consumer Financial Protection Bureau’s Top Six Dubious Accomplishments In 2018 (Talking Points Memo)
“The failure of Mulvaney’s CFPB to properly carry out the law, whether by failing to supervise companies or dropping cases that were underway is a green light for direct and immediate harm to ordinary Americans,” Carter Dougherty, communications director for Americans for Financial Reform, told TPM via email.