WASHINGTON — When Harry Douglas Lane was called upon to speak at a Consumer Financial Protection Bureau forum last year, he appeared to be just another person in the crowd.
A former auto dealer turned fierce consumer advocate, Lane had been outspoken on his nationally syndicated radio show (he goes by "Harry Douglas" on the radio) in pushing for more rules to rein in indirect auto lenders, the subject of the forum.
But unbeknownst to the rest of the audience and the press covering the event, the CFPB had personally invited Lane to attend — and funded his trip at his request.
"They paid my way up there. I flew in the night before, they put me in the Club Quarters, they paid for the whole nine yards," Lane said in an interview. "They wanted me to be there."
It is common for agencies to pay for members of advisory boards and even witnesses to attend sponsored events, but funding the travel arrangements of audience members is not the policy of other regulators or the CFPB itself.
The CFPB says that Lane was initially considered as part of a panel, but that it eventually opted instead to pay travel assistance for him to speak as a member of the audience. The agency did not disclose the connection publicly because Lane's role was "limited," according to Jennifer Howard, a spokeswoman for the CFPB.
When it comes to shaping the message surrounding itself, the CFPB is becoming known for acting differently than other banking regulators. The agency routinely embargoes press releases until late at night, limiting the ability of outsiders to comment during in the first wave of press coverage; that's a practice other banking regulators do not employ, although other federal agencies have done so.
To be sure, some of the CFPB's moves likely come in response to the hostile environment in which it operates. Even before the agency opened its doors, it had many powerful enemies, including Republicans who oppose its existence on ideological grounds and bank lobbyists who disagree with much of its agenda. Every action it takes is heavily scrutinized, and there are many in financial services and elsewhere quick to seize on any misstep, real or imagined.
Some of the actions the CFPB makes, like late night embargoes, are also strategies frequently employed by banks, other private companies and even political campaigns. But that, say critics of its public relations tactics, is precisely the point. The CFPB should be held to a higher standard than politicians and for-profit businesses and instead behave like other banking agencies, they say.
"The CFPB's press office does seem to act a lot more politically oriented compared to other regulators," said Bill Himpler, executive vice president at the American Financial Services Association. "Part of that could be because the other agencies have been around for decades so they're much more regular order in trying to get institutions they regulate the information they need to be responsive."
The CFPB disputes the notion that it operates in a more political fashion than the other financial regulators.
"There is no evidence to support this incendiary assertion," said CFPB spokeswoman Howard.
An Ally in the Audience
Lane's presence in the audience at the November forum likely didn't give the CFPB what it was expecting. The agency had called the event to discuss the impact of a bulletin it issued in March of last year that warned lenders about partnering with auto dealers who are shown statistically to charge minorities higher interest rates than others. At the heart of the issue was the use of a legal doctrine known as "disparate impact," which says lenders are responsible for discrimination against minorities, even if it is unintentional.
At the time of the Nov. 14 forum, the CFPB was under heavy fire from the industry and several GOP lawmakers, who claim it relies on questionable data for which the agency has not disclosed its methodology to their satisfaction.
Lane probably seemed like a natural ally. From his Tennessee studio, he has railed against discriminatory financing at auto dealerships and even hosted a CFPB official on his radio show to discuss the issue. According to Lane, the CFPB invited him to attend the forum and then agreed to provide funding for the trip at his request.
Yet when he was called upon to make a comment, Lane wasn't as supportive as the CFPB might have anticipated, instead questioning whether the bulletin went far enough.
"I just want to know from the Consumer Financial Protection Bureau. Is this really going to have teeth, are you really going to protect the retail automotive consumer?" he asked. "Or is this just going to be a happy talk thing?" (In the video below, Lane's brief speaking role appears roughly 2 hours and nine minutes into the forum.)
A CFPB official deflected Lane's question, saying that the agency was there to receive feedback, not provide it.
Lane ultimately came away disappointed.