Florida Bankers Association President and CEO and former Director of the Consumer Financial Protection Bureau (CFPB) Kathy Kraninger wrote an editorial in the May 14, 2024 American Banker titled “CFPB Must Stop Manipulating Data to Support Its Policy Preferences.” Kraninger served as Director of the CFPB from December 2018 to January 2021. In the editorial, Kraninger cited to the data the CFPB relied upon for its credit card late fee rule and the CFPB’s February 2024 report on credit card pricing. See our previous blog on the February report and our most recent blog on the credit card late fee rule.

With respect to the February report, she explained that the CFPB’s assertion that “larger banks are engaged in anticompetitive and anti-consumer behavior” defies common sense given that there are almost 4,000 credit card issuers. Kraninger asserted that by including credit unions whose rates are capped, the CFPB’s analysis distorted the gap between large and small banks. Kraninger said, “In its February ‘report,’ the bureau went even further — distorting a healthy market to lay the groundwork for an ill-supported late fee rulemaking that will raise costs for the millions of credit card customers who pay on time and reduce access to those most in need of credit products.”

With respect to the credit card late fee rule, Kraninger criticized the CFPB’s use of non-public Y-14 data, which data she called unfit to be used for this purpose. She further noted the CFPB’s failure to conduct the required cost-benefit analysis. Kraninger stated:

The CFPB knows all of this and chose not to address these shortcomings because the information would not advance its agenda. Instead, just in time for President Biden’s State of the Union address in March, the CFPB issued a misguided rule instituting a confusing two-tier system for credit card late fees that is currently being challenged in court. It doesn’t have to be this way.

Kraninger concluded that the CFPB can do better to carry out its mission to stand with consumers and educate them on financial choices. She said, “Manipulating data and misleading the public in pursuit of a policy preference is contrary to that mission. Instead, the agency should play it straight and recommit to only sharing relevant and accurate information. Anything less does a disservice to consumers and only bolsters those who question why the CFPB exists at all.”

We agree with Former Director Kraninger and have previously commented on the CFPB’s actions to carry out the Biden Administration’s political agenda.

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