CFPB effectively dissolves Consumer Advisory Board
Mick Mulvaney took yet another swipe at his consumer watchdog bureau — all but terminating an entire board of advocates who advise the agency about fair lending and underserved communities.
The 25 members of the Consumer Advisory Board, established by law as part of the Consumer Financial Protection Bureau, were told on a conference call Wednesday that the board would not meet again until new members are appointed.
Current members were told that they would not be allowed to reapply, according to a recording of the call obtained by CNNMoney. That notice was softened on a second call, when CFPB officials suggested the members could try again in a few years.
The director of the bureau is required by law to meet twice a year with the panel, which includes experts on predatory lending, fair housing, legal aid and community development. The agency had canceled two meetings previously scheduled for February and June.
“This is what happens when you put someone in charge of an agency they think shouldn’t exist,” Democratic Senator Elizabeth Warren of Massachusetts said in a statement. “Mick Mulvaney has no intention of putting consumers above financial firms that cheat them.”
The CFPB insisted nobody had been fired.
Some board members disagreed, and saw it as yet another step in the Trump administration’s weakening of the consumer bureau since Mulvaney was named acting director in November.
“Firing current members of the advisory board is a huge red flag in this administration’s ongoing erosion of critical consumer financial protections that help average families,” said Chi Chi Wu, a lawyer at the National Consumer Law Center and member of the board.
On the first conference call, Anthony Welcher, policy associate director at the bureau, informed board members that the bureau was changing its plans.
“We’re going to be streamlining some of how the board operates, looking to save money so we can invest that in some of our external engagement and meet the director’s mandate of cutting back on discretionary spending,” he said.
Asked how the CFPB would go about filling the board with new members, Welcher said roughly 200 applicants were under consideration. He spoke repeatedly of finding a diverse group of people.
“It was a smokescreen,” said Kathleen Engel, a research law professor at Suffolk University and another board member. “They were trying to give the impression that we were still members of the CAB and they cared what we thought. But they didn’t want to hold any more meetings.”
Members of two other boards — the Community Bank Advisory Council the Credit Union Advisory Council — were similarly dismissed.
The CFPB was established by the 2010 Dodd-Frank financial reform law to safeguard Americans from financial predators.
The agency has rolled out mortgage and payday-lender rules and cracked down on bad behavior by penalizing Citigroup, Wells Fargo and many other lenders.
But under Mulvaney, the bureau has reversed course. It has delayed the payday-loan rules, dropped lawsuits against payday lenders and stripped enforcement of fair-lending protections.
John Czwartacki, a spokesperson for the bureau, said it would meet its obligation under the law to hold board meetings. But the bureau also wants to reach the public through town halls and roundtables across the country, he said.
Board members on the call expressed alarm, especially considering that the bureau’s new leadership had yet to meet with the board.
“The new bureau leadership has never met with any of us to determine — and even have a sense whether if this is valuable advice that the bureau is receiving,” said Josh Zinner, the CEO of the Interfaith Center on Corporate Responsibility, a leading coalition of progressive shareholders.
“Maybe you can tell us the process by which the new bureau leadership has determined that three advisory boards with deep experience across all areas and diverse backgrounds are not useful to the bureau?”
On the conference call, Welcher dismissed the notion that the board’s expertise wasn’t “useful” and said the agency would probably invite some members to participate in future meetings.
“The difference is we’re not going to necessarily be paying for your travel to have that conversation,” he said.
— Correction: This story has been updated to correct the spelling of Kathleen Engel’s name.