Yesterday, as was widely reported and widely expected, the Senate confirmed Kathy Kraninger to be the next director of the Bureau of Consumer Financial Protection. Kraninger takes over from Mick Mulvaney, who had been acting director following the resignation of former director Richard Cordray. Kraninger’s term atop the BCFP is for five years and during that time, she will likely shape the future of debt collection regulation for the foreseeable future.
Rather than report the news of Kraninger’s confirmation, AccountsRecovery.net sought to delve deeper, to get a sense of what people in the industry think will happen now that she is there. What impact will she have on the ARM industry, broadly, or the proposed debt collection rule, more specifically, people were asked. Thank you to those who participated, because the turnaround time was very tight. Here is what they said:
Leslie Bender, Chief Strategy Officer and General Counsel, BCA Financial Services
The ARM industry has always appreciated the accessibility and transparency of the Bureau of Consumer Financial Protection. Director Kathy Kraninger, a dedicated public servant, is clear that she is committed for the Bureau to be “fair and transparent” and to “empower consumers to make good choices and provide certainty for market participants.” I hope for the privilege of meeting her and working with her team as the Bureau prepares to release regulations to provide certainty in the debt collection space.
Richard Perr, Partner, Fineman Krekstein & Harris
The confirmation of Kathy Kraninger to a five-year term as Director of the Bureau of Consumer Financial Protection will mark the beginning of a period of stability at the Bureau. It also will be the first time a permanent director with a conservative ideological bent will helm the Bureau.
The ARM Industry can expect to see Director Kraninger move to implement more lasting changes than did her immediate predecessor. Acting Director Mulvaney’s role was to stop the aggressive hyperactivity that the Bureau exhibited under Director Richard Cordray. Director Kraninger was appointed to steer the ship in a new direction. She will have five years to do just that regardless of who becomes President in 2020.
Michael Lamm, Managing Partner, Corporate Advisory Solutions
Kathy Kraninger’s confirmation is a “win” for the ARM industry. My hope is that she will will continue the fair and balanced approach to consumer regulation that Mulvaney ushered into the CFPB.
Joann Needleman, Partner, Clark Hill
Kraninger has an opportunity to build on some major improvements at the Bureau which will benefit the ARM industry.
First, the conventional wisdom is that the Notice of Proposed Rule (NPR) for Debt Collection will be published in March or April of 2019 and there is no reason to suggest that Kraninger will not adhere to that timetable. Once published, all in the industry should review the NPR carefully and consider submitting comments, both positive and negative, in order to build an administrative record and to ensure that the rules are clear and that regulatory expectation can be met. Remember, Kraninger came from the Office of Management and Budget (OMB) where cost-benefit analysis was not a passing notion. It will be important for industry to outline and articulate whether the proposed rules do not unduly burden the ARM industry while not providing an otherwise corresponding benefit to consumers.
Second, I sincerely hope that Kraninger funds and supports the Office of Innovation (OOI). It appeared to be a priority for Mulvaney but it was not fully staffed. The ARM industry has been slow to incorporate emerging technologies into operating procedures due to the tremendous risk exposure and private litigation. While many believe that the NPR will address alternative forms of communication, the OOI may be a good incubator to integrate technology with collections operations.
Finally, like her predecessor, Kraninger will continue to engage all stakeholders. This has been helpful to the ARM industry to ensure that policy that will have a direct impact on our industry is not developed in a vacuum.
Dennis Barton, The Barton Law Group
Under acting director Michael Mulvaney, complaints against the financial industry have grown steadily, but publicly-announced enforcement actions have dropped 75%. Kathy Kraninger will likely follow that trend. We should not anticipate the creation of industry-favorable rules from the BFCP, but we can sleep sounded believing it will not pursue initiatives to further regulate creditors and debt collectors.
Yale Levy, Levy & Associates, President, National Creditors Bar Association
Excited about the opportunity that Kraninger’s appointment will usher in an era where common sense regulations are developed so the rules are reasonable and calculated to provide transparency and fair dealings with the consumer but allow financial institutions to deliver quality financial services through many channels.
Ernest “Skip” Kohlmeyer, Urban Thier & Federer, P.A.
My prospective is that the confirmation of Kathy Kraninger will bring a significant change in the BFCP’s approach to compliance with consumer protection laws. Rather than force compliance through heavy handed enforcement actions as seen under Director Cordray, I believe the new Director will take a more business friendly approach by working to provide the financial service institutions with clear and effective directives. These directives will help facilitate better ways to communicate with consumers while hopefully restoring the already strained relationships between government, business and consumers.
John Bedard, Bedard Law Group
The confirmation of Kathy Kraninger should give industry and consumers comfort that government regulation of the market can be fair, balanced, and proportional to marketplace risk.
Brent Yarborough, Maurice Wutscher
We just don’t know much about Director Kraninger’s views on issues like debt collection because she is new to consumer financial services and she did not give many details during the confirmation process. However, she has outlined her priorities for running the Bureau and this should be encouraging for industry. For example, she committed to leading a Bureau that is fair and transparent and that will provide “clear rules for the road.” She also emphasized the importance of cost-benefit analysis and of tailoring regulations to reduce the burden of compliance on small businesses.
I do not expect her confirmation to have an effect on the substance of the forthcoming debt collection rules, but it could affect the timing of the Notice of Proposed Rulemaking, which is currently projected for March 2019. Readers might recall that Acting Director Mulvaney imposed a freeze on rulemaking to give his team an opportunity to review ongoing projects. However, the current transition does not involve the major shift in philosophy that accompanied the last transition, so it is doubtful that a long delay would be necessary or desired.
Roger Weiss, CACi, President-Elect, ACA International
We at ACA International are eager to work with Director Kraninger. Being only the second ever permanent Director of this BCFP, means she has an opportunity to help shape the mission and priorities of the Bureau. We have a great opportunity to help the Bureau understand that the accounts receivables management industry shares the goal of improving consumer outcomes. We will continue to work with Director Kraninger and her staff to outline why clarity is needed about requirements for laws such as the FDCPA, which have not kept up with new consumer preferences for communications methods
Both, Mr. Mulvaney and now, Director Kraninger’s presence in leadership roles has and will continue to be a welcomed change from the years of oppression during Mr. Cordray’s tenure. Just like any other profession, we have a lot of great agencies that operate in compliance with the laws and regulations that govern the ARM industry. However, there are agencies that pay lip service to compliance issues and give our industry a bad name. I believe it is this latter group that will receive the most scrutiny moving forward and the rest of us will benefit from the weeding out process similar to what happened when 95-109 FDCPA was passed.