Consumer Bureau Earns Mixed Reviews on Oversight

Consumer Financial Protection Bureau Director Richard Cordray Consumer Financial Protection Bureau Director Richard Cordray Manuel Balce Ceneta/AP

The Consumer Financial Protection Bureau -- which House Republicans on Thursday pledged once again to eliminate -- has made significant headway in its contentious three years of life, but the agency should improve transparency when implementing tricky regulations, according to a think tank analysis.

In a report  released Tuesday titled “The Consumer Financial Protection Bureau: Measuring the Progress of a New Agency,” the Bipartisan Policy Center concluded that when the bureau “has operated in a transparent, open and iterative manner, repeatedly seeking input from all stakeholders throughout a process, the results were generally positive.”

The center noted that the bureau met its statutory deadlines on a series of complex rules, while considering comments and revising initial findings to improve the final product. “However, when the bureau made unilateral decisions, rolled out initiatives, rules or processes through a more closed, internal deliberation process, the results were far more likely to be problematic,” the analysts said. “Sometimes the bureau went back, sought input, and improved the end result. Sometimes it did not.”

The report analyzed the bureau’s handling of such issues as aggressive credit card solicitations, qualified mortgage rules and consumer ability to pay creditors. The center made 30 recommendations that could “improve the state of consumer protection, increase the efficiency and effectiveness of the financial services industry, and improve the quality of regulation.”

Among them is to implement a “notice and comment” procedure to gather input before issuing regulations and to adopt a recommended set of metrics to gauge the agency’s performance and effectiveness.

The report also called for more oversight of nonbank providers of consumer products and services, as well as improvement of data security.

The Bipartisan Policy Center staffers who prepared the report met with CFPB officials, consumer advocates, federal and state bank regulators, and employees of regulated financial institutions.

“Regardless of whether one supported the creation of the bureau or not,” the authors wrote, “everyone should want it to function as well as possible.”

A CFPB spokesman told Government Executive, “As the CFPB works to carry out its mission of promoting fair and transparent markets for consumers and responsible businesses, the bureau welcomes feedback from all stakeholders.”

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