The CFPB has published a Federal Register notice announcing that a meeting of its Academic Research Council (ARC) will be held in Washington, D.C. on May 2, 2018.
Under former Director Cordray’s leadership, behavioral economics, rather than neo-classical or traditional economics, played a central role in the CFPB’s regulatory and enforcement agenda. Behavioral economics posits that consumers are not rational decision makers and instead have certain frailties or weaknesses that lead them to make decisions that they would later recognize as not in their own best interest.
In addition to hiring behavioral economists, the CFPB has previously appointed behavioral economists to the ARC. Its prior notices inviting applications for ARC membership specifically indicated that the CFPB was looking for “academics with strong methodological and technical expertise in structural or reduced form econometrics, modeling of consumer decision-making, behavioral economics, experimental economics, program evaluation, psychology, and financial choice.” The CFPB had not invited any new applications for ARC membership since Mr. Mulvaney was designated Acting Director by President Trump.
The CFPB’s Federal Register notice states that at the May 2 meeting, the ARC will discuss “methodology and direction for consumer finance research at the Bureau.” Perhaps the role that behavioral economics will continue to play at the CFPB under the leadership of Acting Director Mulvaney or a permanent Director appointed by President Trump will be part of that discussion.