The panel has traditionally played an influential role in advising the CFPB’s leadership on new regulations and policies. But some members, who include prominent consumer advocates, academics and industry executives, began to complain that Mulvaney was ignoring them and making unwise decisions about the agency’s future.
On Monday, 11 CAB members held a news conference and criticized Mulvaney for, among other things, canceling legally required meetings with the group.
On Wednesday, group members were notified that they were being replaced — and that they could not reapply for spots on the new board.
In a statement, the agency’s spokesman, John Czwartacki, took a final swipe at the group. “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,” he said.
Revamping the board is part of the CFPB’s new approach to reaching out to stakeholders to “increase high quality feedback,” the bureau said in an email to the group. The CFPB will hold more town halls and roundtable discussions, the letter said, and the new CAB will have fewer members.
But the dismissal of the members is likely to exacerbate concerns among Democrats that Mulvaney is weakening the consumer watchdog.
“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 in a statement.
Sen. Sherrod Brown (D-Ohio) said: “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.”
As a congressman, Mulvaney repeatedly criticized the agency, calling it a “joke” and saying it needed to be reined in. Since being appointed acting director by President Trump in November, Mulvaney has launched a top-to-bottom review of the bureau’s operations, stripped enforcement powers from a CFPB unit responsible for pursuing discrimination cases and proposed that lawmakers curb the agency’s powers.
Last week, Mulvaney sided with payday lenders who sued the CFPB to block implementation of new industry regulations. The CFPB filed a joint motion with the payday lenders asking the judge to delay the case until the bureau completes a review of the rules, which could take 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 who has been a board member since 2016.
The Consumer Advisory Board is required under the 2010 Dodd-Frank financial law. Members also included the head of retail banking at Citi, the founder of NerdWallet and a director at Texas Appleseed, a public interest law center. Members of two other boards — the Community Bank Advisory Council and the Credit Union Advisory Council — were also dismissed.
In a 30-minute call Wednesday morning to announce the move, a CFPB official sparred with some board members surprised by the decision. “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, according to a recording of the call obtained by The Washington Post.
During the call, Welcher said revamping the CAB would save the agency “multi-hundred-thousand dollars a year” by not having its periodic meetings in Washington. But several board members objected, noting that they would be willing 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.
The board met with Mulvaney’s predecessor, Richard Cordray, three times a year, according to several members. But Mulvaney repeatedly canceled meetings, citing his busy schedule. In addition to leading the CFPB, Mulvaney is the director of the White House Office of Management and Budget.
Their dismissal “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.