Consumer Advisory Board

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.

 

 

The CFPB has published a notice in the Federal Register announcing two public subcommittee meetings of its Consumer Advisory Board (CAB) that will take place by conference call.

The Consumer Lending subcommittee meeting will take place on February 28, 2018 from approximately 1:00 p.m. to 2:30 p.m. EST.  The Mortgages and Small Business Lending Markets subcommittee meeting will take place on March 13, 2018 from approximately 1:00 p.m. to 2:30 p.m. EST.  The notice indicates that the meetings are open to the general public and that members of the public will receive the agenda and dial-in information when they RSVP.  (RSVP directions are provided in the notice.)

The Consumer Lending subcommittee focuses on policy issues related to small dollar lending, debt collection, debt relief, auto lending, consumer reporting, and alternative data.  The Mortgages and Small Business Markets Lending subcommittee focuses on policy issues related to mortgage origination, mortgage securitization and servicing, marketing service agreements, subprime lending, reverse mortgages, the Home Mortgage Disclosure Act, mortgage insurance, risk monitoring, and small business lending.

 

The CFPB has published a notice in the Federal Register announcing that a meeting of its Consumer Advisory Board will be held in Tampa, Florida on November 2, 2017.

The notice states that the Board will discuss “Know Before You Owe: Reverse Mortgages, financial well-being, trends and themes, and payday, vehicle title, and certain high-cost installment loans.”  Presumably, the loan discussion will focus on the CFPB’s final payday loan rule.

We note that the announcement of the event posted on the CFPB’s website indicates that Director Cordray will participate in the meeting.

The CFPB has published a notice in the Federal Register announcing that a meeting of its Consumer Advisory Board will be held on March 2, 2017.  The notice indicates that the Board will discuss the consumer credit information marketplace, CFPB enforcement actions, trends and themes in consumer financial markets, and enhancements to the CFPB Consumer Complaint Database.

The discussion of the consumer credit information marketplace will likely involve the CFPB’s November 2016 request for information regarding market practices related to consumer access to financial information.  The RFI included a discussion of current market practices in connection with consumer-permissioned access to account information, including the role of account aggregators in transmitting consumer data.

The discussion of CFPB Consumer Complaint Database enhancements will likely involve the CFPB’s proposal to add a survey to its current complaint intake form that a consumer can elect to complete to provide feedback on the company’s response to his or her complaint.

The CFPB has published a notice in the Federal Register announcing that it is seeking applications from persons interested in becoming members of its Consumer Advisory Board (Board), Community Bank Advisory Council (CBAC), or Credit Union Advisory Council (CUAC).  Appointments to the Board are typically for three years and appointments to the CBAC and CUAC are typically for two years. 

Membership in the Board is open to persons with expertise in consumer protection, financial services, community development, fair lending and civil rights, and consumer financial products or services, and representatives of depository institutions that primarily serve underserved communities, and representatives of communities that have been significantly impacted by higher-priced mortgage loans.  The notice indicates that “expertise” depends, in part, on “the constituency, interests, or industry sector the nominee seeks to represent, and where appropriate shall include significant expertise as a direct service provider to consumers.”  Dodd-Frank directs the CFPB to seek Board members who represent the interests of industry and consumers. 

Membership in the CBAC is open to individuals (1) with similar expertise or who represent community banks that primarily serve underserved communities or communities that have been significantly impacted by higher-priced mortgage loans, and (2) who are current employees of banks and thrifts with total assets of $10 billion or less that are not affiliates of depository institutions or credit unions with total assets of more than $10 billion.

Membership in the CUAC is also open to individuals (1) with similar expertise or who represent credit unions that primarily serve underserved communities or communities that have been significantly impacted by higher-priced mortgage loans,  and (2) who are current employees of credit unions with total assets of $10 billion or less that are not affiliates of depository institutions or credit unions with total assets of more than $10 billion.

The CFPB states that it has a special interest in ensuring that women, minority groups and individuals with disabilities are adequately represented on the three advisory groups.  It further states that because it also has a special interest in establishing a Board that is represented by diverse viewpoints and constituencies, the CFPB encourages applications for Board membership from candidates who represent U.S. geographic diversity and the interests of special populations identified in Dodd-Frank such as servicemembers and older Americans.

Applicants for the positions must submit a complete application package on or before March 1, 2017 to be considered for membership.  (The application will be available online on January 16, 2017.)  The CFPB expects to announce new members in August 2017.

The CFPB has published a notice in the Federal Register announcing that a meeting of its Consumer Advisory Board (CAB) will be held on October 27, 2016.

The notice indicates that the CAB will discuss “student loan servicing issues and trends and themes in debt collection.”  Presumably, the student loan servicing issues will include servicers’ handling of partial payments, which was the subject of a recent CFPB blog post, and the Department of Education’s recent announcements concerning student loan servicing.  The debt collection discussion can be expected to include the debt collection proposals that the CFPB is considering, which it outlined in July 2016 in anticipation of convening a SBREFA panel.

 

The CFPB has announced the appointment of new members to its Consumer Advisory Board, Community Bank Advisory Council, Credit Union Advisory Council, and Academic Research Council.  In January 2016, the CFPB published a notice in the Federal Register soliciting applications from individuals interested in becoming members.

According to the CFPB, the new members “include experts in consumer protection, financial services, community development, fair lending, civil rights, consumer financial products or services, representatives of community banks and credit unions, and scholars with relevant methodological and subject matter experience.”  New Consumer Advisory Board and Academic Research Council members will serve three-year terms and new Community Bank and Credit Union Advisory Councils members will serve two-year terms.

The new members are as follows:

Consumer Advisory Board Members

  • Lynn Drysdale, Managing Attorney, Consumer Law Unit, Jacksonville Area Legal Aid, Inc., Jacksonville, FL
  • Paulina Gonzalez, Executive Director, California Reinvestment Coalition, San Francisco, CA
  • William Howle, Head of U.S. Retail Bank, Citibank, New York, NY
  • Ruhi Maker, Senior Attorney, Empire Justice Center, Rochester, NY
  • Arjan Schutte, Founder and Managing Partner, Core Innovation Capital, Los Angeles, CA
  • Lisa Servon, Professor, The New School, New York University, New York, NY
  • Raul Vazquez, Chief Executive Officer, Oportun, Redwood City, CA
  • James M. Wehmann, Executive Vice President, Scores for Fair Isaac Corporation, Roseville, MN
  • Chi Chi Wu, Staff Attorney, National Consumer Law Center, Boston, MA

Community Bank Advisory Council Members

  • Melissa A. Ballard, Vice President and Director, First Iowa State Bank, Albia, IA
  • Menzo D. Case, President and Chief Executive Officer, Generations Bank, Seneca Falls, NY
  • Linda Feighery, Vice President and Community Reinvestment Act /Fair Lending Officer for Citywide Banks, Denver, CO
  • Brenda K. Hughes, Senior Vice President and Director of Mortgage and Retail Lending, First Federal Savings Bank of Twin Falls, Twin Falls, IA
  • Dion Kidd Johnson, President, Chief Operating Officer and Chief Risk Officer, Western Bank, Alamogordo, NM
  • Cal Ratcliff, Senior Vice President, Chief Compliance Officer, Bank of North Carolina, High Point, NC
  • Trent Sorbe, President, Central Payments Division, Central Bank of Kansas City, Kansas City, MO

Credit Union Advisory Council Members

  • Faith Lleva Anderson, Senior Vice President and General Counsel, American  Airlines Federal Credit Union, Fort Worth, TX
  • Daniel Berry, Chief Executive Officer, Duke University Federal Credit Union, Durham, NC
  • Patrick F. Harrigan, Chief Risk Officer and General Counsel, Service Credit Union, Portsmouth, NH
  • Ricardo Ledezma, Corporate Compliance Assurance Manager, San Antonio Federal Credit Union, San Antonio, TX
  • Sarah Marshall, Chief Executive Officer, North Side Community Federal Credit Union, Chicago, IL
  • Dayatra T. Matthews, Senior Vice President of Legal & Compliance, Local Government Federal Credit Union, Raleigh, NC
  • Amy Nelson, Chief Executive Officer, Point West Credit Union, Portland, OR
  • Raynor Zillgitt, Vice President Risk Management and General Counsel, Lake Trust Credit Union, Brighton, MI

Academic Research Council Members

  • Ian Ayres, William K. Townsend Professor, Yale Law School, New Haven, CT
  • Brigitte Madrian, Professor, Harvard University, Cambridge, MA

Both Professor Madrian and Professor Ayres hold a Ph.D. in economics.  According to her profile on the website of Harvard’s Kennedy School of Government, Professor Madrian’s current research is focused on “behavioral economics and household finance, with a particular focus on household savings and investment behavior.”  Professor Madrian’s research focus fits within the CFPB’s orientation towards the use of behavioral economics, an economic theory that has been playing a central role in the CFPB’s regulatory and enforcement agenda.  The CFPB seems reluctant to include neo-classical economists who do not subscribe to behavioral economics on its Academic Research Council.

Director Cordray has described Professor Ayres as having “deep experience in analyzing discrimination.  He also had been engaged in careful study of economic and legal issues related to consumer finance.”  Based on our review of Professor Ayres’ CV on the Yale Law School website, it appears he has written extensively on issues relating to gender and race discrimination, including discrimination in auto sales.  A 2014 article in the Michigan Journal of Race and Law described Professor Ayres as having spent much of his career “empirically documenting race and gender discrimination, including in the context of consumer purchasing.”

The CFPB has published a notice in the Federal Register indicating that it will hold a meeting of its Consumer Advisory Board on June 9, 2016 in Little Rock, Arkansas.  The topics to be discussed at the meeting are “an auto lending education initiative, trends and themes, and payday lending.”  Since the CFPB is expected to issue its proposed payday lending/auto title loan rule in conjunction  with its field hearing on small dollar lending on June 2, 2016, the discussion of payday lending at the meeting will presumably include a discussion of the proposed rule.

 

 

The CFPB will hold a meeting of its Consumer Advisory Board in Washington, D.C. on February 25, 2016.  According to the meeting agenda, there will be morning session on the CFPB’s strategic outlook, with the speaker to be Chris D’Angelo, Chief of Staff, Office of the Director.

The topic for the afternoon session is measuring financial well-being, with the speakers to be Janneke Ratcliffe, Assistant Director, Financial Education, and Genevieve Melford, Senior Financial Education Research Analyst, Financial Education.  This past December, the CFPB issued a new guide for financial educators containing a 10-question scale to measure “financial well-being” and instructions for scoring a consumer’s responses and interpreting scores.

The CFPB has published notices in the Federal Register announcing that it is seeking applications from persons interested in becoming members of its Academic Research Council (ARC), Consumer Advisory Board (Board), Community Bank Advisory Council (CBAC), or Credit Union Advisory Council (CUAC). Appointments to the ARC and Board are typically for three years and appointments to the CBAC and CUAC are typically for two years.

The ARC currently has six members and the CFPB is seeking to fill three additional seats.  The CFPB seeks “tenured academics with a world class research and publishing background, and a record of public or academic service.”  Applicants should be “prominent experts who are recognized for their professional achievement and objectivity in economics, statistics, psychology or behavioral science.”  In particular, the CFPB is 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.”

Membership in the Board is open to persons with expertise in consumer protection, financial services, community development, fair lending and civil rights, and consumer financial products or services, and representatives of depository institutions that primarily serve underserved communities, and representatives of communities that have been significantly impacted by higher-priced mortgage loans.  The notice indicates that “expertise” depends, in part, on “the constituency, interests, or industry sector the nominee seeks to represent, and where appropriate shall include significant expertise as a direct service provider to consumers.”  Dodd-Frank directs the CFPB to seek Board members who represent the interests of industry and consumers.

Membership in the CBAC is open to individuals (1) with similar expertise or who represent community banks that primarily serve underserved communities or communities that have been significantly impacted by higher-priced mortgage loans, and (2) who are current employees of banks and thrifts with total assets of $10 billion or less that are not affiliates of depository institutions or credit unions with total assets of more than $10 billion.

Membership in the CUAC is also open to individuals (1) with similar expertise or who represent credit unions that primarily serve underserved communities or communities that have been significantly impacted by higher-priced mortgage loans,  and (2) who are current employees of credit unions with total assets of $10 billion or less that are not affiliates of depository institutions or credit unions with total assets of more than $10 billion.

The CFPB states that it has a special interest in ensuring that women, minority groups and individuals with disabilities are adequately represented in all of the advisory groups.  It further states that because it also has a special interest in establishing a Board that is represented by diverse viewpoints and constituencies, the CFPB encourages applications for Board membership from candidates who represent U.S. geographic diversity and the interests of special populations identified in Dodd-Frank such as servicemembers and older Americans.

Applicants for the ARC positions must submit a complete application package on or before February 12, 2016 to be considered for membership.  The CFPB expects to announce new ARC members in April 2016.  Applicants for the other positions must submit a complete application package on or before February 29, 2016 to be considered for membership.  The CFPB expects to announce new Board, CBAC and CUAC members in August 2016.