June 07, 2021

Independent Watchdog Finds Trump Administration's Unjustified CFPB Reshuffling Undermined Enforcement of Fair Lending Laws

GAO Report

Washington, DC - United States Senator Elizabeth Warren (D-Mass.), a member of the Senate Committee on Banking, Housing, and Urban Affairs, made the following statement regarding findings from a new Government Accountability Office (GAO) investigation of the Consumer Financial Protection Bureau's (CFPB) oversight and enforcement of fair lending laws under the Trump administration. The GAO report follows a request made by Senators Warren and Sherrod Brown (D-Ohio). 

The Home Mortgage Disclosure Act (HMDA), Equal Credit Opportunity Act (ECOA), and other fair lending laws were designed to curtail discriminatory lending practices, but the reorganization by CFPB leaders during the Trump administration raised broader questions about  the ability and willingness of Trump-appointed CFPB leadership to protect consumers from discrimination. When Acting Director Mulvaney took over in 2017, he stripped the fair lending office of its supervisory and enforcement powers.

"When Mick Mulvaney took over as Acting Director of the CFPB, he brought in his own team of political hacks, gutted the Bureau's fair lending office, and stripped Bureau attorneys of enforcement power, preventing the agency from being able to do its job. It is critical that under its new leadership, the CFPB prioritizes the enforcement of fair lending laws and obtains restitution for consumers harmed by discriminatory lending practices" Senator Warren said. 

During the Trump administration, Senator Warren conducted vigorous oversight of the banking and financial sectors and the efforts to weaken the CFPB:

  • In November 2019, Senators Warren and Brown raised alarm in a letter to CFPB amid reports of gender discrimination by Goldman Sachs and the new Apple card.
  • In June 2019, Senator Warren asked regulators about discrimination built into automated lending decisions that resulted in Latinx and African-American borrowers being charged higher interest rates.
  • In August 2019, Senator Warren, along with Representatives Raja Kristhnamoorthi (D-Ill.), Ayanna Pressley (D-Mass.), and Katie Porter (D-Calif.), pressed the CFPB for information about a proposal that would indefinitely exempt financial technology companies from complying with consumer protection and anti-discrimination laws.
  • At a March 2019 Senate Banking Committee hearing, Senator Warren criticized then-Director Kraninger for the sharp decline in enforcement actions and a significant drop in compensation to consumers.
  • Senator Warren raised concerns and called for the removal of Trump administration official Eric Blankenstein, who has a history of racist writings and whose views disqualified him from overseeing the enforcement of lending discrimination law while at the CFPB. She also called on the CFPB to fire Paul Watkins, the former director of CFPB's Office of Innovation who previously represented an anti-LGBTQ hate group.
  • In February 2018, Senators Warren, Brown, and Representative Maxine Waters (D-Calif.) wrote to Office of Management and Budget (OMB) Director Mulvaney about his decision to relocate the Office of Fair Lending and Equal Opportunity and to strip it of its statutorily mandated supervisory and enforcement powers while he ran the CFPB.
  • In January 2018, Senator Warren and Congresswoman Waters sent a letter to former Acting CFPB Director Leandra English and former OMB Director Mulvaney, questioning Mulvaney's actions that benefited payday and installment lenders and raising concerns about Mulvaney's close ties to the payday loan industry.
  • In May 2018, Senator Warren joined Senator Catherine Cortez Masto (D-Nev.) in sending a letter to Mark Bialek, Inspector General of the Federal Reserve System, urging him to investigate Mulvaney's actions at the CFPB after reports surfaced that Mulvaney has taken numerous actions to benefit payday lenders.

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