Is Mulvaney trying to purge CFPB's advisory board?

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Mick Mulvaney's decision to scrap meetings of the Consumer Financial Protection Bureau's consumer advisory board is stoking fears among consumer advocates that the agency's acting director wants to stack the panel with his own hand-picked members.

Members of the 25-member board, which under the Dodd-Frank Act is mandated to "advise and consult" the agency, on Monday voiced criticism of the CFPB's having canceled a meeting scheduled later this week and a previous one in February. They said Mulvaney is flouting the law, and appears to be laying the groundwork to change the board's composition.

"We continue to hold out hope that the acting director will start following the law, and be open to input from a body that has provided valuable input and engagement for many years," said Chi Chi Wu, a staff attorney at the National Consumer Law Center, and a member of the CFPB's consumer advisory board.

Acting CFPB Director Mick Mulvaney
Mick Mulvaney, acting director of the Consumer Financial Protection Bureau (CFPB), speaks during a Senate Banking, Housing & Urban Affairs Committee hearing in Washington, D.C., U.S., on Thursday, April 12, 2018. Senator Elizabeth Warren clashed with Mulvaney, accusing the former GOP congressman of putting politics ahead of protecting consumers. Photographer: Toya Sarno Jordan/Bloomberg

Wu was one of 11 consumer advocates, attorneys and other stakeholders on the board who held a press conference alleging that Mulvaney is ignoring statutory requirements that the board meet twice a year. They suggested he wants to suspend meetings until his own hand-picked advisers have been chosen to replace existing members.

In March, the CFPB announced on a blog post that it was accepting applications for three of its advisory boards and specifically wanted "experts with diverse viewpoints," including "representatives of banks that primarily serve underserved communities."

The letter stated that "10 seats on the Consumer Advisory Board will become vacant in the fall of 2018."

Dodd-Frank requires that the consumer advisory board meet twice a year, with a mandate to "advise and consult with the Bureau in the exercise of its functions under the Federal consumer financial laws."

So far, Mulvaney scrapped a meeting scheduled for June 6. Meanwhile, members learned about the February cancellation when a notice was posted on the CFPB's website.

The CFPB gave no explanation for why the board's last two meetings had been canceled. When asked to comment, the bureau referred to a statement it had issued to Bloomberg News, which read, “It is natural that new leadership would re-evaluate its community and consumer outreach efforts, and that will necessarily include consideration of the timing, frequency, content, and other aspects of the Bureau’s meetings.”

Fifteen of the board's 25 members sent a letter to Mulvaney on May 25 calling the cancellation of both meetings "a troubling sign."

"It appears that the bureau does not want to engage with us," said Ann Baddour, the board's chairperson and a director at the public interest law center Texas Appleseed. "We have received no response." Baddour said Mulvaney spoke to the board on a conference call in March for 20 minutes.

Mulvaney has the authority to establish, renew or remove appointments to the agency's advisory boards.

Two other advisory boards also have not held meetings. Critics say the meeting cancellations are a further sign Mulvaney is seeking to reorganize the bureau. The current advisory boards were put together under his predecessor, Richard Cordray. (The consumer advisory board is the only board mandated by Dodd-Frank.)

In addition to Dodd-Frank, board members expressed concerns that the CFPB could be running afoul of the 2016 Federal Advisory Committee Act, a law that governs the establishment and operation of advisory committees. The law requires that group meetings be announced in advanced, be open to the public, and that the constitution of any board be balanced.

Kathleen Engel, a research professor at Suffolk University Law School, who is on the consumer board, said Mulvaney could legally hold two statutorily required meetings of the consumer board after he had picked a slate of 10 new members.

"Although the administration has the ability to add new people to the [consumer advisory board], it has to do so in light of the requirements," Engel said. "Members of the [consumer advisory board] cannot be inappropriately influenced by the new director of the CFPB, so any new members have to be independent of the mission or priorities, they cannot be inappropriately influenced by the acting director."

The 25 board members serve as volunteers providing information on emerging practices in the consumer financial services industry, including regional trends and concerns of consumers.

Many are consumer advocates with positions at nonprofit groups such as the California Reinvestment Coalition and Jacksonville Area Legal Aid, which was on the forefront helping mortgage borrowers during the financial crisis.

The board also includes industry representatives and fintech experts. Members include William Howle II, Citigroup's head of retail banking; Randi Adelstein, Mastercard's assistant general counsel; and Neil F. Hall, a retired former head of PNC's retail banking unit.

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Dodd-Frank Regulatory actions and programs Consumer banking Mick Mulvaney CFPB
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