Democrats reiterate concerns about head of CFPB innovation office

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WASHINGTON — Democratic lawmakers are reiterating concerns about a Consumer Financial Protection Bureau official’s work with an organization that the Southern Poverty Law Center labeled an anti-LGBTQ hate group.

The lawmakers again sought details about the prior work of Paul Watkins, director of the CFPB's Office of Innovation, at the Alliance Defending Freedom's Blackstone Legal Fellowship. The SPLC's website says the Alliance Defending Freedom "has supported the recriminalization of homosexuality in the U.S."

In a letter to CFPB Director Kathy Kraninger, Sen. Elizabeth Warren, D-Mass., and three House members raised questions about Watkins' past ties in light of the consumer bureau's recent fintech-related policies that the lawmakers said potentially exempt firms from anti-discrimination laws.

“We are concerned that these proposals would undermine crucial laws designed to inform consumers and protect them from discrimination and unfair acts and practices," Warren wrote Thursday along with Reps. Ayanna Pressley, D-Mass., Katie Porter, D-Calif., and Raja Kristhnamoorthi, D-Ill. “We have grave concerns about Mr. Watkins holding the authority to waive anti-discrimination laws given his prior employment at Alliance Defending Freedom."

Warren, Pressley and Porter had previously raised concerns about Watkins in a June 25 letter in which they called on the CFPB to reconsider his hiring.

In the letter Wednesday, the lawmakers asked for details on how the CFPB recruited Watkins, as well as for all documents related to his work at Alliance Defending Freedom. They are asking Kraninger to provide all email communications that include Watkins referencing the terms LGBT, LGBTQ, gay, trans and queer, among others.

The lawmakers are also asking Kraninger to describe the evaluation process for "no-action letter" applications received since October 2013. Through Watkins' office, fintech startups can seek enforcement waivers from the CFPB as they test new products.

The Democrats also requested that the CFPB identify companies and trade associations with which the agency discussed no-action letters and the agency's fintech regulatory sandbox since November 2017.

The lawmakers are asking what role Watkins will play in evaluating applications for no-action letters and participating in the fintech sandbox, which would effectively exempt firms from complying with certain unfair, deceptive, and abusive acts and practices laws.

The letter comes after progressive groups have sounded the alarm about Watkins’ fitness to lead the innovation office, given the discretion his position has to exempt certain companies from complying with anti-discrimination laws.

From 2012 to 2014, Watkins worked for Alliance Defending Freedom’s Blackstone Legal Fellowship, a leadership training program for law students.

Watkins told a House subcommittee in June that he did not engage in advocacy and litigation at Alliance Defending Freedom, and that he was committed to upholding the CFPB’s policies.

But the lawmakers said that Blackstone provided a “core curriculum” of reading resources, including a book, co-written by former Alliance Defending Freedom CEO Alan Sears, titled “The Homosexual Agenda: Exposing the Principal Threat to Religious Freedom Today.”

Watkins told the subcommittee in June that the anti-LGBTQ views espoused by Sears are “clearly unconstitutional.”

The lawmakers are asking the CFPB to respond by Aug. 29. The bureau did not immediately respond to a request for comment for this article.

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Fintech regulations Sexual orientation discrimination Elizabeth Warren Kathy Kraninger CFPB