The CFPB recently reported that on September 27 in St. Louis, it met with its Consumer Advisory Board, and on October 10 and October 11 at its D.C. headquarters, it met with, respectively, its Community Bank Advisory Council and its Credit Union Advisory Council. (See our September 14 blog post for information on who the CFPB appointed to the Board and Councils and the charters of these groups.) 

Absent from the CFPB’s description of the Board and Council meetings was any mention of a substantive discussion about specific CFPB developments such as proposed regulations, enforcement activities or examinations. According to the CFPB, in its meeting with the Consumer Advisory Board, Board members “offered their observations of how American consumers are getting along in the wake of the financial crisis.” The Council meetings included staff presentations about two CFPB divisions: Supervision, Enforcement, and Fair Lending and Consumer Education and Engagement.   Council members “also engaged in strategic discussions about how smaller institutions help to level the playing field for consumers who have difficulty managing their money and what the opportunities and challenges are in mortgage lending for small financial service institutions.”  

The CFPB described various “themes that emerged” during those discussions, including  (1) that successful loss mitigation outcomes for troubled borrowers of small community banks result from the retention of servicing by such banks and the direct and continuous contact the banks have with their customer base, (2) whether the role of credit unions “is to provide cash-crunched consumers with viable and more cost-efficient alternatives to high-interest payday loans or to provide education and services designed to help their members become less reliant on short-term small-dollar loans,” and (3) the need for the CFPB to make sure that the cost of complying with new regulations is not overly burdensome on small institutions.

We are glad to see that the CFPB is sharing information about the meetings of its Board and Community Bank and Credit Union Advisory Councils.  We hope the CFPB will be similarly forthcoming in providing information about meetings of its Academic Research Council, which the CFPB was not required or authorized to create under Dodd-Frank.  Also, the CFPB did not seek public input regarding its nominations to the Council.  Instead, it appointed six professors—two from Harvard (where now Senator-elect Elizabeth Warren was a professor) and one each from Yale, Brown, MIT, and Chicago.  (In contrast, in its report on the September 27 meeting with its Consumer Advisory Board, the CFPB touted the fact that it publicly solicited nominations to the Board, describing the Board as “our crowd-sourced group of experts.”)  Given the influence the Academic Research Council will undoubtedly have in connection with empirical studies being conducted by the CFPB regarding products such as payday loans and practices such as arbitration, it is particularly important for industry members and consumers alike to be informed about the Council’s activities.