The CFPB has agreed to settle the lawsuit filed by the National Association of Consumer Advocates, U.S. Public Interest Research Group, and Professor Kathleen Engel challenging the legality of the Bureau’s Taskforce on Federal Consumer Financial Law.  The central allegation in the complaint was that the Taskforce failed to comply with the Federal Advisory Committee Act (FACA), a federal law that governs the creation, operation, and management of advisory committees to federal agencies.  The Taskforce released its report making recommendations on how to improve consumer protection in the financial marketplace in January 2021.

In the Stipulated Settlement Agreement, the parties stipulate that the Taskforce was subject to FACA and that the CFPB failed to comply with FACA’s requirements in establishing and operating the Taskforce.  The Settlement Agreement also provides that:

  • The Bureau will release to the plaintiffs, on a rolling basis, all Taskforce records “that would have been made public if the [Bureau] had complied with FACA’s requirements.”  The rollout will begin on January 17, 2022 and must be completed by March 22, 2022.  The Bureau will also make the records publicly available on its website.
  • The Bureau will amend the Taskforce’s two-volume report to add a disclaimer stating that the report was produced in violation of FACA and to add “a prominent warning label” in bold red font on the cover page of each volume stating that the report was produced in violation of FACA.  The disclaimer must include a description of the FACA requirements that the Bureau failed to satisfy.  It must also include the following statement:

Adhering to FACA’s requirements ‘ensure[s] that advisory committees are fairly constituted and properly monitored so that they will provide sound advice.’ (case citation omitted)  Because the Taskforce did not comply with FACA’s requirements, readers should not assume that the report provides ‘sound advice.’

  • The Bureau will move the Taskforce webpage which is currently located under the Rules and Policy Page to the Advisory Committees Page and add a disclaimer on the Taskforce webpage that the Taskforce was created in violation of FACA.  The Bureau will ensure that any links to the Taskforce on its website, including in prior press releases, are directed to the amended report. The current version of the report will be removed from the Bureau’s website.

Within minutes of its release in January 2021, the Taskforce’s report met with intense criticism from consumer advocacy groups.  In our blog post about the report, we commented that given the then imminent change in Administrations, there was considerable uncertainty as to what the ultimate impact of the Taskforce’s recommendations will be.  While the settlement does not fully expunge the report from the public record, it clearly will allow the CFPB’s current leadership to ignore the Taskforce’s recommendations when exercising the CFPB’s authorities.