CFPB official will be recused from agency's suit against Fifth Third
The new acting deputy director of the Consumer Financial Protection Bureau will be recused from the agency's legal proceedings involving Fifth Third Bancorp, according to a CFPB spokesperson.
Leonard Chanin, recently tapped to serve as the CFPB's No. 2 leader under Director Kathy Kraninger on a part-time basis, worked as a deputy general counsel at Fifth Third from March 2017 to March 2019. Chanin is also the deputy to FDIC Chair Jelena McWilliams.
The CFPB sued the Cincinnati bank this week for allegedly opening unauthorized bank and credit card accounts without consumers’ knowledge. The bureau said the bank did not take steps to detect and stop the practice.
The time frame at issue in the CFPB lawsuit — 2010 to 2016 — does not coincide with Chanin's tenure at the bank. Yet Chanin's ties to the bank — as well as those of McWilliams, who was Chanin's boss at Fifth Third — came up during the Senate Banking Committee's questioning this week of Kraninger.
“FDIC Chair Jelena McWilliams would have known about the fake accounts, she was legal officer at Fifth Third for a couple-year period,” said Sen. Sherrod Brown of Ohio, the committee's top Democrat, said at the hearing. “Leonard Chanin was also her deputy at Fifth Third before he became deputy at the FDIC. He would have known about the bureau’s fake-account investigation at Fifth Third.”
Chanin — who had held prior jobs at both the consumer bureau and the Federal Reserve — and McWilliams were both employed by Fifth Third during the CFPB's three-year investigation of the bank.
“Even with this background, you recently named Mr. Chanin to serve as deputy director,” Brown said to Kraninger. “Did you know about his role in the fake-account scandal at Fifth Third when you hired him?”
Kraninger responded, “I can assure you Mr. Chanin is a longstanding public servant who served at the Fed, who was the [former] head of regulations at the CFPB.”
The FDIC declined to comment, noting the CFPB's continuing investigation of the bank.
Fifth Third has vowed to fight the CFPB's lawsuit, which it called “unnecessary and unwarranted.” The bank said it identified a total of 1,100 unauthorized accounts out of 10 million that were opened between 2010 and 2016. The bank said the consumers suffered less than $30,000 in improper charges and that those were waived or reimbursed to customers years ago.