Kathy Kraninger

After taking over the agency in December, CFPB Director Kathy Kraninger declined to discuss Blankenstein’s future at the agency, referring to the ongoing review. | J. Scott Applewhite, File/AP Photo

FINANCE & TAX

Consumer bureau official at center of racial uproar resigns

A senior Consumer Financial Protection Bureau employee whose racially charged blog posts sparked an uproar last year is leaving the agency at the end of the month.

Eric Blankenstein, the policy associate director for the Supervision, Enforcement and Fair Lending division of the bureau, is leaving the agency after 18 months for a new job elsewhere, he said in an email to employees on Wednesday.

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“It has been my privilege to serve the American people here to further the Bureau’s mission of protecting consumers,” he told colleagues, according to a copy of the email obtained by POLITICO.

Blankenstein, a political appointee hired by former CFPB acting director Mick Mulvaney, questioned the legitimacy of hate crimes and whether using the N-word is inherently racist, in old blog posts uncovered by the Washington Post in September.

The writings drew the condemnation of Democratic lawmakers, consumer advocates and agency employees, leading Mulvaney to refer the matter to the CFPB’s inspector general.

After taking over the agency in December, CFPB Director Kathy Kraninger declined to discuss Blankenstein’s future at the agency, referring to the ongoing review.

The status of the inspector general review is not known. The inspector general’s office did not immediately respond to a request for comment.

When Sen. Sherrod Brown (D-Ohio), the top Democrat on the Senate Banking Committee, pressed Kraninger to read portions of the blog posts during a hearing in March, she declined, saying “the words here are not words that I would use.”

Brown responded today to Blankenstein's resignation: “Eric Blankenstein should have been fired for his hateful, reprehensible and disgusting blog posts, and allowing him to resign is a serious moral and managerial failure that sends a signal to consumers that the CFPB will look the other way when it comes to discrimination,” he said in a statement. “Director Kraninger should hire someone with a track record of standing up for civil rights, and restore all authorities of the Office of Fair Lending and Equal Opportunity.”

Blankenstein’s resignation was reported earlier by Bloomberg Law.

Consumer advocates agreed that his depature was overdue.

“What took so long? For over five months, Director Kraninger tolerated the racist views of a top aide that had no business overseeing lending discrimination matters on behalf of America’s consumers,” Jeremy Funk, a spokesperson for Allied Progress, said in an email. “She should have fired Mr. Blankenstein on her first day.”

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