Mick Mulvaney in November arrives at CFPB, where he is acting director.

Mick Mulvaney in November arrives at CFPB, where he is acting director. Jacquelyn Martin/AP

Consumer Bureau Irks Advisory Board Members By Delaying Meetings

Critics say the move may violate the 2010 financial reform law.

Continued postponements of meetings of the Consumer Advisory Board attached to the Consumer Financial Protection Bureau prompted 11 of the panel’s 25 nongovernmental members to protest acting bureau director Mick Mulvaney’s failure to convene in-person meetings, citing a possible violation of the 2010 Dodd-Frank Financial Reform Act.

In a Monday conference call, the subset of the consumer advocates, industry representatives and academics on what the agency calls its “crowdsourced” body expressed concerns about the dramatic changes in policy and direction under Mulvaney—who doubles as President Trump’s budget director and who is a longtime critic of the bureau’s very existence.

Specifically, they protested that the only interaction the full slate of CAB members has had with Mulvaney was a phone call on March 6, 2018, for 20 minutes. That contrasts, they noted, with their deep involvement early in the bureau’s seven-year history in addressing such mission issues as debt collection and mortgage abuses.

“We can’t forget that American families lost one-third of their wealth just a decade ago due to reckless market practices that hurt individuals, communities and honest businesses alike,” said Ann Baddour, chair of the CAB and director of the Fair Financial Services Project at Texas Appleseed. “As the bureau unilaterally shifts its mission from one prioritizing consumer protection and upholding fair market practices to one focused on industry regulatory relief—we see families, once again, being left behind.”

The diverse experts on the board, its members noted in two letters to Mulvaney this spring that went unanswered, come from many regions and represent a diversity of races, ethnicities, ages, and genders. “This vital information from diverse groups is unavailable in any other forum and can lead to important interventions before serious harm is done to American families and the economy,” they said on Monday.

Immediately following their press call, Mulvaney sent the group a letter saying “there is no cause for concern,” though the meeting scheduled for June 6-7 was canceled.

In a Tuesday statement to Government Executive, a bureau spokesperson said, “The bureau’s advisory boards and councils have provided valuable advice and consultation as we carry out our mission. It is natural that new leadership would reevaluate 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. The bureau will meet all [Federal Advisory Committee Act] and statutory obligations for CAB, including those around composition and the requirement of at least two meetings this year.”

She added that “the bureau is committed to expanding its external engagements and hearing from a diverse range of consumer advocacy, civil rights and industry voices.”

The advisory board members stressed that its diversity has produced “unexpected points of agreement” on some issues. But there has been no opportunity for them to weigh in, the letter-writers protested, on such major changes as the shutdown of the bureau’s Office of Students and Young Consumers, “failing to bring any new enforcement actions except some already in the pipeline before the change in administration, stripping enforcement authority from the statutorily-required Office of Fair Lending and Equal Opportunity, and joining with payday loan trade groups to seek a court order delaying compliance with the bureau’s own payday loan rule.”

The advisory board’s members, a third of whom are replaced yearly, fear that Mulvaney will appoint “partisans who share only one viewpoint. The result will be a less robust body,” they said.

Mulvaney’s motives were questioned by Karl Frisch, executive director of the liberal group Allied Progress. “Mulvaney already told us he gives more access to lobbyists who give him money and now it seems that corrupt policy extends to legally obligated meetings at the CFPB,” Frisch said. “If only the average consumer could write him a check with that many zeros, maybe then Mulvaney would feel compelled to follow the law, clear his calendar, and meet with members of the Consumer Advisory Board that represent actual consumers rather than special interests.” 

Allied Progress last week also attacked Mulvaney after he sent staff an email on May 31 announcing that he was lifting a hold he placed in December on the bureau’s data collection following “an exhaustive review” by an anti-hacking team. “When I first arrived at the bureau, I was concerned that the information the bureau collects about consumers could fall prey to hackers or other actors,” he wrote. “So, out of an abundance of caution and a desire to protect Americans’ privacy, I placed a hold on the collection of personally identifiable information and other sensitive data.”

Promising new security measures and improved staff training to avoid email “phishing” attacks, Mulvaney told staff, “Those of you involved with data collection can expect to hear shortly from your division or office leadership. They will have guidance to share about how to resume collecting information and what to tell financial institutions or other external organizations about my decision.”

He added, “This process has been an important exercise in holding ourselves to the same high standards to which we hold the entities we oversee.”

Critics, however, portrayed the data collecting freeze as an “attack on the bureau’s ability to enforce laws protecting consumers from financial bad actors,” as Allied Progress put it, citing an inspector general report giving the bureau’s online security largely high marks. “The CFPB’s data collection efforts have been on Mick Mulvaney’s chopping block from the very beginning because he knows shutting this important work down would grind the bureau’s enforcement of consumer protection laws to a halt,” Frisch said. That’s something the Wall Street special interests that showered him with $1.2 million in campaign cash would love to see.”