There is a common temptation in corporate America: If you don’t like what a consultant says, fire them and find one that tells you what you want to hear.
With a variation on this theme, Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, has disbanded his agency’s Consumer Advisory Board, dismissing 25 outside experts who were intended to help shape agency policy. It is the latest in a series of moves to reshape the Bureau into Mulvaney’s more business-friendly vision and satisfy Republicans who have derided the largely autonomous agency since it opened its doors.
The Bureau, in a conference call on Wednesday, told CAB members, and members of two other advisory boards, that their terms were terminated and that they were not permitted to re-apply should new committees be formed.
The decision prodded this rebuke on Twitter from Sen. Elizabeth Warren (D-Mass.): “[Mulvaney] has no intention of putting consumers above financial firms that cheat them. This is what happens when you put someone in charge of an agency they think shouldn’t exist.”
“Firing the current CAB members is another move indicating Acting Director Mick Mulvaney is only interested in obtaining views from his inner circle, and has no interest in hearing the perspectives of those who work with struggling American families,” says the now former CAB chair, Ann Baddour, senior policy analyst with Texas Appleseed, a public interest justice center.
The Dodd-Frank Act, when creating the CFPB, also required the creation of advisory boards to guide its work. The CAB was instructed to convene at least two times 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.”
The board’s 25 members were chosen by the Bureau from academia, consumer groups, and the financial services industry.
The abrupt dismissals didn’t come without foreshadowing. CAB members recently complained about Mulvaney’s efforts to restructure the Bureau and his seeming refusal to meet with, or listen to advisory boards. He canceled at least two in-person meetings and multiple conference calls with the CAB, its members say.
This decision to disband the CAB comes just two days after 11 consumer advocates and academics expressed their concerns in a letter to Mulvaney about the cancellation of the only two CAB meetings scheduled for this year.
“Several of us have been informed, when we inquired about travel arrangements for the June 6-7 meeting, that [it] will likely be canceled. Canceling the meeting raises significant issues regarding compliance with legal obligations related to the CAB and its service,” they wrote.
“The one opportunity we have had to speak to you as a body was a phone call that was scheduled to last one hour but ended up with your speaking with us for less than 20 minutes,” they added. “[We] are extremely concerned that that our collective input is not valued.”
“We urge you not to cancel the [June] meeting, not only because we are legally required to meet, but also because we want the opportunity to share our work with you and have a conversation about how we can better work together for the benefit of the CFPB, American people, and well-intentioned financial service and product providers,” the letter concludes.
That May 25 correspondence, was preceded by a May 18 letter to Mulvaney that Baddour authored.
“You can imagine my surprise, then, when I heard from other CAB members that they were receiving emails from the Bureau regarding travel arrangements for the June 6-7 meeting, indicating that the meeting may be canceled,” she wrote. “I hope this is a misunderstanding. Canceling the meeting would open up deep concerns regarding both the value that the Bureau places on the CAB, as well as compliance with legal obligations related to the CAB and CAB service.”
For its part, in a call to advisory board members on Wednesday, Anthony Welcher, policy advisor for external affairs at the CFPB, cited several reasons for the dismissals. He also elaborated on the matter in Bureau blog post.
“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,” he wrote.
“The Bureau will continue to fulfill its statutory obligations to convene the Consumer Advisory Board and will continue to provide forums for the Community Bank Advisory Council and the Credit Union Advisory Council,” Welcher added. “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. By both right-sizing its advisory councils and ramping up outreach to external groups, the Bureau will enhance its ability to hear from consumer, civil rights, and industry groups on a more regular basis.”
The National Consumer Law Center provided its own summary of the call to advisory board members.
“The Bureau wanted to save a few hundred thousand dollars, which is estimated to be less than .08 percent of the agency’s overall budge,” it wrote in a statement. “This is despite the fact that members on today’s call offered to pay to attend meetings from their own budgets.”
The Bureau also cited responses to a Request for Information on external engagement as a justification for the change. “When pressed, Welcher admitted that the decision was made before the RFI had closed, and he could point to no RFI response calling for dissolving the advisory boards,” the group wrote. “A review of the RFI responses reveals there was no response calling for a restructuring or dissolution of the current advisory boards.”
“Members questioned how Acting Director Mulvaney could have come to this conclusion based on the fact there had been no meaningful interaction with members,” the group’s statement added. “One of the additional explanations for the firing of the Advisory Board members is a “new” plan to hold Town Hall meetings and intimate roundtable discussions—two long-standing practices of the CFPB—and therefore not a justification for firing over 60 committed and diverse volunteers.”
The coalition voiced concerns that with the disbanding of advisory groups, “Acting Director Mulvaney now has the opportunity to stack the board with new CAB members who likely will embrace his deregulatory efforts.”
“This partisan act will endanger families across the nation as well as our economy,” says Lynn Drysdale, division chief for consumer advocacy and the litigation unit of Jacksonville Area Legal Aid and the CAB vice chair. “Federal law requires that the CAB be a well-balanced entity in terms of point of view and that it not be ‘inappropriately influenced by’ the Bureau director. Any other composition goes against the standards of the law.”
“Firing current members of the advisory board is a huge red flag in this administration’s ongoing erosion of critical consumer financial protections that help average families,” says National Consumer Law Center Attorney Chi Chi Wu, also a member of the CAB. “Apparently Acting Director Mulvaney is willing to listen to industry lobbyists who make campaign contributions, but not the statutorily appointed Consumer Advisory Board members.”
Firing the CAB is “yet another attack on critically important consumer protections,” says Ruhi Maker, a senior attorney in the Rochester office of the Empire Justice Center. She was appointed to the CAB for a three-year term in August 2016.
“As a result of this baseless action, more hard-earned income will be stripped from those who live paycheck to paycheck to fill the coffers of Wall Street,” she added.