And Now, the Consumer Advisory Board Has Been Let Go
Mick Mulvaney, acting director of the Consumer Financial Protection Bureau (CFPB), let every member of the Consumer Advisory Board (CAB) go after some of 25 members criticized his leadership of the group. The members were notified that they were being replaced and they could not reapply for positions on the replacement board. The CFPB said it will reinstate CAB in the fall with new members.
The panel has traditionally played an influential role in advising the CFPB’s leadership on new policies. But some members began to complain that Mulvaney was ignoring them and insisting he was making unwise decisions about the agency’s future. In fact, Mulvaney continually canceled legally required meetings with the group, which was the subject of a recently held news conference with eleven of the members.
In a statement, the agency’s spokesman, John Czwartacki, said, “The outspoken members of the Consumer Advisory Board seem more concerned about protecting their taxpayer-funded junkets to Washington, D.C., and being wined and dined by the Bureau than protecting consumers.”
The agency indicated revising the board is part of its newly instituted approach of reaching out to stakeholders to “increase high-quality feedback.” The CFPB said it plans to host more town halls and roundtable discussions. The future CAB will consist of fewer members.
Democrats have been concerned that the anti-supporter of the watchdog group, Mulvaney, doesn’t have the consumer’s interest in mind at all. As a congressman, Mulvaney openly criticized the group time and again, calling it a “joke.” Since being appointed acting director by President Trump in November, Mulvaney has launched a full review of the bureau’s operations, stripped enforcement powers from a unit responsible for pursuing discrimination cases, and has proposed that lawmakers further rein in the CAB’s powers of authority.
“Mick Mulvaney has no intention of putting consumers above financial firms that cheat them. This is what happens when you put someone in charge of an agency they think shouldn’t exist,” Sen. Elizabeth Warren (D-Mass.), who helped conceive of the bureau, said.
Sen. Sherrod Brown (D-Ohio) added, “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 hard-working Americans are not cheated by financial scams.”
One week prior to his decision to let the whole team go, Mulvaney sided with payday lenders who sued the CFPB to block implementation of new industry regulations. The CFPB filed a joint motion with the lenders asking the judge to delay the case until the bureau is able to complete a review of the rules. The process could take several years.
“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, an attorney for the National Consumer Law Center. The CAB is required to be in place under the 2010 Dodd-Frank financial law.
“We’ve decided we’re going to start the advisory groups with new membership, to bring in these new perspectives and new dialogue,” said Anthony Welcher, the CFPB’s policy associate director for external affairs. Welcher said revamping the CAB would save the agency “multi-hundred-thousand dollars a year,” particularly by not having its periodic meetings in Washington. Several board members objected to the slight, stating they would be happy to pay their own way to attend the meetings.
“The new bureau leadership has never met with any of us to determine, and even have a sense of, whether this is valuable advice that the bureau is receiving,” said Josh Zinner, chief executive of the Interfaith Center on Corporate Responsibility.
Mulvaney repeatedly canceled meetings scheduled with the board before he let them go, saying he was too busy to attend. In addition to leading the CFPB, Mulvaney is the director of the White House Office of Management and Budget. Since taking on acting directorship for the CFPB, Mulvaney has also made a number of questionable decisions, including his choice last month to close the student lending office, which had been tasked with returning $750 million in student loan relief while investigating potential abuses. It had been primarily responsible for looking into Navient and its alleged unfair practices. The department also sued Corinthian Colleges, a for-profit education company. Mulvaney’s reallocated its responsibilities to “financial education.”
His decision to let go of existing members “is another move indicating Acting Director Mick Mulvaney is only interested in obtaining views from his inner circle and has no interest in hearing the perspectives of those who work with struggling American families,” said Ann Baddour, chair of the CAB and director of the Fair Financial Services Project at Texas Appleseed.