Top CFPB official yanks support for political appointee over past writings

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The head of the Consumer Financial Protection Bureau’s fair- lending office said Friday she has grave doubts about a proposed restructuring of her office after reading blog posts written more than a decade ago by a top agency aide.

Patrice Ficklin, the director of the office, sent an email to staff on Friday afternoon saying she no longer supports Eric Blankenstein, the CFPB’s policy director for supervision, enforcement and fair lending. The Washington Post reported Wednesday that Blankenstein wrote in blogs 14 years ago that a majority of hate crimes were hoaxes and that using a racial slur did not necessarily make someone a racist.

Ficklin initially was quoted by the Post supporting Blankenstein, but in her email Friday said she had not read the blog posts at the time and now has pulled her support.

“I have had experiences that have raised concerns that are now quite alarming in light of the content of his blog posts — experiences that call into question Eric’s ability and intent to carry out his and the Acting Director’s repeated yet unsubstantiated commitment to a continued strong fair lending program under governing legal precedent,” she wrote in the email, a copy of which was obtained by American Banker.

Ficklin called for acting CFPB Director Mick Mulvaney to pause a proposed reorganization of the agency’s office of fair lending and equal opportunity.

“In light of my concerns I am asking the acting Director to pause the proposed reorganization of the Office of Fair Lending and Equal Opportunity. I no longer have faith that the Bureau’s obligation to enforce the fair lending laws will be faithfully discharged in the currently-contemplated reorganized structure," she wrote.

Blankenstein is a political appointee hired early this year by Mulvaney to work alongside the career staff at the CFPB to ensure they are enacting the Trump administration's agenda. Mulvaney in February sought to strip the fair-lending office of its enforcement authority and remove it from its equal footing alongside supervision and enforcement, the division that Blankenstein now runs. Though the move has been held up in part by a conflict with the CFPB's union, Blankenstein is still listed as Ficklin's boss on the agency's organizational chart.

The CFPB declined to comment for this article.

In his writings, Blankenstein referred to a University of Virginia proposal to impose harsh penalties for acts of intolerance as “racial idiocy.”

In the blog, he wrote: “Fine . . . let’s say they called him a n -----,” the Post reported, noting that Blankenstein spelled out the slur. “Would that make them racists, or just a--------?”

Blankenstein has said his past writings have no bearing on his current role. Ficklin appeared to reject that view.

"After the article appeared, I began to read his posts and was struck by how they reminded me of debates we’ve had with Eric on supervisory and enforcement matters," she wrote. "I firmly believe that Eric, like the rest of us, is entitled to have his own political views, and that in his position he has authority to make the policy decisions for our division. What I find appalling, however, is the tone and framing of those views in his blog posts."

She said the writings showed a disregard for African Americans, the LGBTQ community and other minority groups.

"The tone and framing are deeply disturbing and offensive to me as a woman, African American, advocate for LGBTQ rights, and human being," Ficklin wrote. "They are far from civil discourse, and I am disappointed that Eric has not expressed regret about the tone and framing of his remarks made 14 years ago. I also am deeply disappointed that his quote in the Post article included no statement from him expressing support for a vigorous fair lending program."

Ficklin said she did not have time to read the blog posts before being asked to support her colleague.

"When Eric Blankenstein asked me to make a statement in support of him to the Washington Post, I dropped everything I was doing while on leave to honor his request," she said. "Because he asked me to send the statement to him by 12 noon if possible, I did not read his blog posts before drafting my quote."

The CFPB’s fair-lending office is still listed in the agency’s organizational chart as an equal division alongside supervision and enforcement. Ficklin is listed as the assistant director of fair lending and equal opportunity, reporting to Blankenstein.

Blankenstein spent six months at the Office of the United States Trade Representative before joining the CFPB earlier this year. He previously worked for a decade at the law firm Williams & Connolly. Though Blankenstein is technically Ficklin's boss, her email suggests he is still learning about fair-lending laws.

"My experience with Eric has involved give and take as we have taught him about fair lending jurisprudence and statistical methods," she wrote.

Subsequent to the Post story, Sen. Sherrod Brown, D-Ohio, has blasted the blog posts, arguing Blankenstein must resign given his views.

"These blog posts are hateful, reprehensible and disgusting," Brown said in a statement on Friday. "Placing Blankenstein in charge of fair lending was a serious moral and managerial failure, and he must go. The CFPB should be on the front lines of fighting and preventing predatory lending practices including very real financial discrimination that happens all too often in America today. There can be no place at the agency for people who don’t believe discrimination is real or a serious problem.”

Ficklin is a longtime career CFPB official. Under the Obama administration, Ficklin's fair-lending office made several contentious enforcement actions, including citing some of the largest indirect auto lenders for unintentional discrimination under a legal theory called disparate impact. Republicans released reports challenging the theory and methodology that the CFPB created when it decided not to use the method other bank regulators used to cite for discriminatory lending.

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Enforcement actions Enforcement Sexual orientation discrimination Racial Bias Mick Mulvaney CFPB