The CFPB has published a post blog indicating that it plans to reconstitute three of its advisory groups: the Consumer Advisory Board (CAB), the Community Bank Advisory Council (CBAC), and the Credit Union Advisory Council (CUAC).
The blog post’s publication followed an eruption of controversy over the CFPB’s cancellation of a CAB meeting scheduled for today and tomorrow as well as media reports that the blog post’s author, Anthony Welcher, CFPB Policy Associate Director for External Affairs, had informed CAB members in a conference call today that their terms were terminated and they were not permitted to reapply for membership. (CAB members have generally been appointed for a 3-year term.)
The series of RFIs issued by the CFPB included an RFI seeking comment on its public and non-public external engagements, including meetings of the CFPB’s advisory groups. Comments on the RFI were due by May 29, 2018. In its blog post, the CFPB states that “this week the Bureau begins the process of transforming the Bureau’s Stakeholder Outreach and Engagement work, which includes transitioning from former modes of outreach to a new strategy to increase high quality feedback.” It also states that the comments it received in response to the RFI “informed our shift to expand external engagements and modify our Advisory Board and Councils to be one focused tool in the evaluative process.”
Section 1014 of Dodd-Frank required the CFPB to establish the CAB and provides that the CAB “shall meet from time to time at the call of the Director, but, at a minimum, shall meet at least twice in each year.” Dodd-Frank did not require the CFPB to establish either the CBAC or CUAC. Both Councils were established by the CFPB in the exercise of the Director’s discretion pursuant to his executive and administrative authority under Dodd-Frank Section 1012.
The CFPB’s blog post states that it “will continue to fulfill its statutory obligations to convene the [CAB] and will continue to provide forums for the [CBAC] and the [CUAC].” It further states that the Bureau “will continue these advisory groups and will use the current 2018 application and selection process to reconstitute the current advisory groups with new, smaller memberships.” (The CFPB’s statement that it plans to reconstitute all three groups indicates that it has also terminated or plans to terminate the terms of current CBAC and CUAC members.)
The blog post further indicates that the CFPB plans to “increase its strategic outreach to encourage in-depth conversations, sharing information, and developing partnerships focused on consumers in underserved communities and geographies. These engagements will include regional town halls, roundtable discussions at the Bureau’s headquarters with consumer finance experts and representatives, regional roundtables, and regular national calls.” In the blog post, the CFPB announces that on June 8, 2018, in Topeka, Kansas, the CFPB will co-host a town hall, “Fighting Elder Financial Exploitation in your Community,” with the Kansas Attorney General, to “recognize effective state and local efforts addressing elder exploitation generally and elder financial exploitation.”
The CFPB’s cancellation of the CAB meeting that was scheduled for today and tomorrow provoked criticism from CAB members. The CFPB had previously cancelled the CAB’s February 2018 scheduled meeting. In a letter to Acting Director Mulvaney signed by the CAB’s Chair and Vice Chair as well as 13 of the CAB’s 23 other members, CAB members stated that the cancellation “raises significant issues regarding compliance with legal obligations related to the CAB and CAB service.” They cited to Dodd-Frank Section 1014(a) which requires the CAB to convene twice a year to “advise and consult with the Bureau in the exercise of its functions under the Federal consumer financial laws and to provide information on emerging practices in the consumer financial products and services industry, including regional trends, concerns and other relevant information.” Calling the cancellation “a troubling sign,” the members state that they “are extremely concerned that our collective input is not valued.”
In a letter responding to the members’ letter, Mr. Mulvaney stated that he “can assure [them] that there is no cause for concern” and that the CAB “will meet at my call (or at the call of a newly confirmed Director) at least twice this calendar year, in fulfillment of the Bureau’s legal obligations.” Under former Director Cordray, the CAB held three meetings each year. As noted above, Section 1014 of Dodd-Frank requires only two CAB meetings per year. Acting Director Mulvaney’s response is consistent with his general practice of adhering to what Dodd-Frank requires rather than following the expansive approach to the CFPB’s exercise of its authorities that prevailed under former Director Cordray.