Senators seek ex-CFPB official's ouster over alleged use of power

Dive Brief:

Sens. Sherrod Brown, D-OH, and Elizabeth Warren, D-MA, called Monday for the Department of Housing and Urban Development (HUD) to fire former Consumer Financial Protection Bureau official Eric Blankenstein. A CFPB inspector general report said Blankenstein "may have abused his authority" by asking a subordinate to "provide a statement of support" to The Washington Post last year, when the paper reported that Blankenstein used racially charged language in a blog in 2004.
Blankenstein, a political appointee, resigned from the CFPB in May and took a job the next month as a senior counsel at HUD. Brown and Warren criticized the move in letters to HUD Secretary Ben Carson and CFPB Chief Kathy Kraninger, saying Blankenstein would have been barred from other government jobs had he been terminated. They also asked Kraninger to eliminate political appointees.
Patrice Ficklin, the director of the CFPB's Office of Fair Lending, initially was quoted supporting Blankenstein in the Post, but pulled her support two days later, saying she had not read the 2004 blog posts. Blankenstein, under a pen name, suggested in the blog that people who use racial slurs are not necessarily racist and that most hate crimes were "hoaxes."

Dive Insight:

"Continuing to employ Mr. Blankenstein at a high-level position at HUD despite the troubling findings and conclusions of the IG's report would send a disturbing message," Brown and Warren wrote Monday to Carson.

In another letter, the senators asked the IG to consider dismantling the CFPB's Office of Fair Lending, which was stripped of its enforcement powers by former acting Director Mick Mulvaney. "There are too many unanswered questions," Brown and Warren wrote.

The inspector general found no evidence that Blankenstein coerced Ficklin to show her support. But Ficklin, whose name is redacted in the report, said she thought she "had to provide the statement to preserve" the fair lending program.

Blankenstein asked Mulvaney whether he should resign, according to the IG report. But "Blankenstein described his encounter … as Mulvaney giving 'him a high-five that morning in, sort of, celebration of the article,'" the report said, according to American Banker.