In a new opinion column for American Banker, former Consumer Financial Protection Bureau Director Kathy Kraninger said she is concerned about the bureau’s “misleading use of data to create an inaccurate picture of the credit card market.” Kraninger, who is currently president and CEO of the Florida Bankers Association, said consumers should be able to rely on CFPB information without concern of manipulation in service of a partisan agenda. She suggested that several recent actions by the CFPB have called that impartiality into question.
The first is the February release of a report using what Kraninger said was cherry-picked data to show larger card issuers charge substantially higher interest rates than smaller banks, but in the process ignored the complexity of the market. More egregious was the CFPB’s failure to make clear that the analysis included credit unions, whose lending rates are capped by law, she said. Kraninger also said that when the agency issued rulemaking on credit card late fees, it relied on confidential Y-14 data collected by the Federal Reserve for its cost-benefit analysis, limiting the public’s ability to double-check the bureau’s conclusions.
“The CFPB’s primary job is to stand with consumers and help educate them about the financial choices they face,” Kraninger 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.”
