Research, regulation, industry reports

CFPB advisory board dissolved after members criticize agency

Fred Williams

After six months under its Trump-appointed leader, the U.S. Consumer Financial Protection Bureau is showing new signs of strain as it scales back consumer protection activities.

On Wednesday, the agency announced the dissolution of its 25-person Consumer Advisory Board, two days after 11 of its members publicly criticized the bureau’s leadership.

In an email to the board members on Wednesday, agency leadership said that the board will be reconstituted later this year and will meet a legal requirement of two meetings a year.

The move was done to streamline the board with smaller membership, among other reasons, according to the agency. Current board members can continue to serve, but no meetings are expected until the board is reconstituted.

In a call with reporters on Monday the 11 dissident advisory board members – including the chair and vice-chair – said acting director John M. “Mick” Mulvaney canceled meetings with the board while turning the agency away from its consumer protection mission.

See related: Trump appointee promises ‘dramatically different’ CFPB

Board accuses CFPB leadership of ignoring views

“Firing the current CAB members is another move indicating Acting Director Mick Mulvaney is only interested in obtaining views from his inner circle,”  CAB Chair Ann Baddour said in a statement on Wednesday reacting to the firing of current board members.

Baddour is a project director at Texas Appleseed, a nonprofit that says its mission is social and economic justice.

The advisory board has had no input in agency policy since Mulvaney was appointed in November 2017, she said.

Since then the agency has nearly halted new enforcement actions and delayed or rolled back regulations on industry.

As the director of the White House Office of Management and Budget, Mulvaney lacks the independence from politics that was envisioned by the law that created the consumer bureau, according to a court challenge to his appointment.

In a recent move, the CFPB joined a payday loan industry group in a legal motion to delay its pending regulation of payday and auto title loans by more than a year.

“Without regard to your political perspective, it’s hard to see an agency that put nearly $12 billion back into the pockets of American families be significantly stripped of its effectiveness,” advisory board vice-chair Lynn Drysdale said on the media call Monday.

Drysdale is a division chief at Jacksonville Area Legal Aid in Florida.

The CFPB is reconstituting all of its advisory boards and councils, the agency’s email said, as part of a broad overhaul of its public engagement process. The Consumer Advisory Board is the only board required under the Dodd-Frank Act that created the consumer protection bureau.

Baddour said Anthony Welcher, head of the CFPB’s external affairs division, held a call with board members Wednesday and portrayed the board dissolution as a money-saving move, although members on the call offered to pay their own travel costs, she said.

Rather, the dissident members said in a statement that the restructuring may be an opportunity to stack the board with members who support the agency’s emphasis on deregulation.

Under federal appointment law, Mulvaney’s term as acting director will expire June 22, or 210 days – about seven months – after his appointment Nov. 25, 2017.

However, if a nominee for the director job is rejected by the Senate, Mulvaney would be able to continue another seven months in an acting capacity. The White House has not submitted a nominee.

Republican lawmakers express support of Mulvaney

Republican members of Congress broadly support Mulvaney, saying he is reining in an agency that has too much power over the businesses it regulates.

“Director Mulvaney continues to be an outstanding acting director as he restores true and meaningful accountability and due process of law to an agency that desperately needs it,” House Financial Services Committee Chairman Jeb Hensarling said in a March 2 statement. He and other members of the Republican party filed a court brief supporting Mulvaney’s appointment.

The payday loan rule, studied by the CFPB for more than five years, survived a challenge in Congress last month when a deadline expired for repealing the rule.

Consumer advocates see the bureau’s court alliance with payday lenders to block the rule now as a betrayal of the agency’s mission.

“It is appalling that an agency with a singular focus on protecting consumers is now teaming up with a payday lending industry that is notorious for trapping people in debt,” Scott Astrada, director of federal policy at the Center for Responsible Lending, said in a statement.

Future of complaint database still undecided

Consumer advocates are watching to see if the agency removes complaints about financial companies from its website.

The public complaint database was established in 2012, starting with credit card complaints, for consumers and researchers to check on providers of financial services.

In remarks to members of Congress, Mulvaney has said he is considering removing the complaints from public view. A public comment period on the issue expired June 4, attracting 23,200 comments.

The bureau’s consumer advisory board is established in Section 1014 of the Dodd-Frank Act. The bureau also has advisory boards that focus on community banks and credit unions, and an academic research council.

The consumer advisory board currently has 25 members, according to a published roster. In addition to consumer advocates, the members include law professors and industry representatives from companies such as Mastercard, Citibank and FICO.

Under the previous director, Obama-appointee Richard Cordray, the advisory board met with the director or senior agency staff three times a year in two-day sessions, board members said. The board had input on debt collection, small-business lending, mortgage lending and servicing and credit reporting.

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, we ask that you do not disclose confidential or personal information such as your bank account numbers, social security numbers, etc. Keep in mind that anything you post may be disclosed, published, transmitted or reused.

The editorial content on is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.