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From Banking and Finance Law Daily, June 7, 2018

CFPB’s reorganization of Consumer Advisory Board elicits criticism

By Thomas G. Wolfe, J.D.

In a blog post, the Consumer Financial Protection Bureau has declared that, based on public comments it received in response to its Request for Information on the Bureau’s external affairs and engagements, the agency will transition to a "new strategy" to "expand external engagements and modify our Advisory Board and Councils to be one focused tool in the evaluative process." According to the June 6, 2018, blog posttitled "Transforming the way we engage" and authored by Anthony Welcher, the Bureau will be "right-sizing" and "reconstituting" its advisory groups—such as the Consumer Advisory Board, Community Bank Advisory Council, and Credit Union Advisory Council—"with new, smaller memberships." Although the CFPB post indicates that the Bureau will continue to provide forums for the advisory groups, CFPB Acting Director Mick Mulvaney has been reported in the press as stating that the Consumer Advisory Board will be dismantled and its members dismissed. This development has elicited strong criticism from two Democratic leaders in Congress and from the Center for Responsible Lending and Public Citizen as well.

The Dodd-Frank Act called for the formation of the Consumer Advisory Board, a panel that primarily informs the Bureau about practices, products, and issues in the consumer financial services marketplace. The Board also analyzes issues and problems raised at meetings and makes recommendations to the Bureau.

Democratic congressional leaders. Senator Sherrod Brown (D-Ohio), Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, criticized Mulvaney’s reported decision to disband the CFPB’s Consumer Advisory Board. According to Brown, "Mulvaney has proven once again he would rather cozy up with payday lenders and industry insiders than listen to consumer advocates who want to make sure hardworking Americans are not cheated by financial scams."

Similarly, Rep. Maxine Waters (D-Calif), Ranking Member of the House Committee on Financial Services, remarked, "It’s telling that the Consumer Bureau is saying that the Consumer Advisory Board should be ‘right-sized’ in order to ‘increase high quality feedback.’ Since Mulvaney has cancelled the group’s meetings, he has no basis for describing its feedback, as he never received any. Firing the current members of the Consumer Advisory Board is one more signal that under Mulvaney, consumers come last."

CRL and Public Citizen. Commenting on Mulvaney’s purported plan to dismiss the members of the Consumer Advisory Board, Deborah Goldstein, Executive Vice President of the Center for Responsible Lending, stated, "This reckless decision to dismiss the members of the Consumer Advisory Board shows the level of disdain Mick Mulvaney has for consumer protection, and it demonstrates his inability to lead both the CFPB and the Office of Management and Budget."

In addition, Goldstein questioned the likelihood that the CFPB would have been able to thoroughly review all of the public comments it received from its Request for Information on the Bureau’s external engagements in such a short period of time. "Mulvaney shouldn’t make a mockery of the public comment process," she asserted.

Likewise, in a June 6, 2018, statement, Lisa Gilbert, Vice President of Legislative Affairs at Public Citizen, said, "Removing the consumer group members of the Consumer Advisory Board is just one more example of Mick Mulvaney’s careless disregard for the actual mission of his agency. The statutorily mandated consumer board is a key part of the process at the CFPB, and the Main Street American consumer perspective it brings is critical to the functioning of the agency."

Companies: Center for Responsible Lending; Public Citizen

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