Allied Progress and American Oversight Go to Court Against CFPB on Heels of Troubling Report that CFPB Has Ceased Fair Lending Enforcement Actions

WASHINGTON, D.C. – Ahead of CFPB Director Kathy Kraninger’s appearance before the House Financial Services Committee this week, consumer advocacy group Allied Progress, represented by American Oversight, filed a Freedom of Information Act (FOIA) lawsuit against the CFPB seeking information that would shed light on why Eric Blankenstein remains a Policy Associate Director at the CFPB despite the fireable revelations in September 2018 that Blankenstein authored numerous racist and sexist blog posts as early as 2004 and as recently as 2016.

In early October, Allied Progress filed five FOIA requests with the CFPB requesting email correspondence from numerous bureau officials, including Eric Blankenstein, in the days following the Washington Post’sreport that Blankenstein had published a blog under a pen name where he expressed racist and sexist views. Allied Progress’ requests included emails related to an all-staff email sent by Patrice Ficklin, the Assistant Director of Fair Lending & Equal Opportunity, who publicly withdrew her initial statement of support for Blankenstein, requested on deadline by Blankenstein himself, and then voiced concerns about his ability to enforce fair lending after reading his troubling blog posts. Despite multiple attempts by Allied Progress to contact the CFPB by phone and email to discuss the five FOIA requests, the CFPB has failed to provide any of the requested documents.

The lawsuit comes just days after the U.S. House Financial Services Subcommittee on Diversity and Inclusion held a hearing on “Diversity Trends in the Financial Services Industry.” It also follows the CFPB’s Fall 2018 Semi-Annual Report to Congress that acknowledged the agency did not file a single fair lending public enforcement action from the time of former Director Richard Cordray’s departure in November 2017 through September 30, 2018 and that the Bureau chose to not initiate or refer any matters to the Department of Justice related to discrimination, despite the Bureau receiving approximately 329,000 complaints from April 1 — September 30, 2018.

“The CFPB is tasked with protecting consumers from financial predators, not protecting officials from accountability for racism. The public has a right to know how much time and effort senior Trump administration officials, including Mick Mulvaney, spent shielding Blankenstein and keeping him in his job,” said Austin Evers, Executive Director of American Oversight.

“This cannot be allowed to become just another Trump administration scandal,” said Kyle Herrig, senior advisor to Allied Progress. “There is simply too much at stake to accept that someone who holds racist views – views Blankenstein tellingly never apologized for – is currently overseeing, with cruel irony, the CFPB’s efforts enforce consumer protection laws for ALL Americans. Current Director Kathy Kraninger has never weighed in publicly about the controversy, but we hope this lawsuit will change that.”

Eric Blankenstein should have been fired immediately last September. But then-Acting CFPB Director Mick Mulvaney kept his handpicked lieutenant in place in the face of internal revolt from CFPB staff and demands for Blankenstein’s ouster from a chorus of consumer advocacy and civil rights groups and members of Congress. The public deserves to know how and why this decision was made. The man who was hired to oversee CFPB’s fair lending enforcement has lost all public trust that he can ensure that African Americans and other minorities will receive fair, non-discriminatory access to credit in light of his history of trafficking in hate as recently as a few years ago. This is especially concerning after Mulvaney gutted the CFPB’s enforcement powers and made it easier for lending discrimination to take place — policies which Kraninger has carried on with a smile.

Added Herrig: “As long as Blankenstein continues to draw a hefty taxpayer salary, consumers are left to assume that Kathy Kraninger either doesn’t care about his views, or worse, approves of a racist overseeing lending discrimination matters in her agency. But based on the recent CFPB report, it’s clear the Trump administration hasn’t cared about consumers being exploited for some time now.”

Allied Progress is a consumer watchdog organization that uses hard-hitting research and creative campaigns to hold Wall Street special interests and their allies in Congress and the White House accountable.

American Oversight is a non-partisan, nonprofit ethics watchdog and is the top Freedom of Information Act litigator investigating the Trump administration. American Oversight has filed more than 60 public records lawsuits since March 2017, uncovering and publishing tens of thousands of documents including senior officials’ calendars, emails, and expense records.

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