Mulvaney Dismantles Consumer Protection Bureau Advisory Board

Mulvaney Dismantles Consumer Protection Bureau Advisory Board

The defanging of the Consumer Financial Protection Bureau continued last week, when Acting Director Mick Mulvaney dismantled the agency's advisory board.

The bureau, the brainchild of Sen. Elizabeth Warren, was already under fire for its lack of action under the Trump administration. Mulvaney has been accused of catering to corporate concerns, rather than safeguarding consumers. His approach to the job contrasts sharply with that of the former director, Richard Cordray, who aggressively enforced regulations. Mulvaney canceled the last two advisory board meetings. The panel has not convened since President Trump named him acting director late last year.

 According to a recording of a conference call that Politico obtained, bureau Associate Director Anthony Welcher told the advisers on Wednesday: “We’re doing our best now to execute on sort of what we will define as a different form of reaching out and engaging the community.”

Warren, who has repeatedly criticized Mulvaney, declared that the acting director “has no intention of putting consumers above financial firms that cheat them.” The Massachusetts Democrat continued: “This is what happens when you put someone in charge of an agency they think shouldn’t exist.”

Ann Baddour, the advisory board's chairwoman, alleged that 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.” Another board member, National Consumer Law Center attorney Chi Chi Wu, described the disbanding of the panel as “a huge red flag in this administration’s ongoing erosion of critical financial protections that help average families.”

Welcher pledged to replace the advisers with other consultants. “We're going to start the group with sort of a new membership, to bring in these new perspectives for these new dialogues,” he said during his phone call. “We're going to be transitioning … over the next few months.” Welcher explained that the bureau is “streamlining” how the board operates, adding: “We’re also looking to save money, so we can invest that in some of our other external engagements.”

Delicia Hand, assistant director of the CFPB’s Office of Advisory Boards and Councils, wrote in an email: “The bureau will continue to fulfill its statutory obligations to convene the Consumer Advisory Board. … We don’t plan on having any additional meetings until the appointment of a new board.”

After Mulvaney called off board meetings scheduled for February and June, 15 panel members joined in issuing a statement claiming that the cancellations “raise significant issues regarding compliance with legal obligations.” Eleven of the advisers appeared at a press conference earlier this week to slam Mulvaney.

The acting director responded by writing to Baddour: “You expressed concern regarding the postponement of CAB’s June meeting, and reminded me that the CAB must meet at least twice a year. I can assure you there is no cause for concern in this regard. The CAB will meet at my call, or at the call of a newly confirmed director, at least twice this calendar year.”

Mulvaney also scrapped other CPFB advisory groups, such as the Academic Research Council, the Community Bank Advisory Council, and the Credit Union Advisory Council. He vowed to replace them with new entities to “ensure streamlined discussions around the bureau’s policy priorities and needs in a productive manner.” The dismissed members of the councils and boards are not eligible to apply for any newly created positions in the bureau.

The actions are “infuriating,” Ruhi Maker told Vox. The Empire Justice Center lawyer, one of the fired advisory board members, warned that the bureau is left only with “political advisers who essentially are not interested in protecting American consumers.” She said they “are interested in serving those people who prey on American consumers and make profits on the backs of American consumers who have the least ability to afford it.”

Mulvaney is a conservative who has never supported the CFPB. In 2014, the former congressman from South Carolina told the Credit Union Times: “It's a wonderful example of how a bureaucracy will function if it has no accountability to anybody. It turns up being a joke, and that’s what the CFPB really has been, in a sick, sad kind of way, because you’ve got an institution that has tremendous authority over what you all do for a living.” He went on to call the bureau “extraordinarily frightening,” and said that “some of us would like to get rid of it.”

The bureau was part of the Dodd-Frank legislation Congress passed in response to the financial crisis of 2008. The agency is responsible for scrutinizing the practices of banks and other lenders, securities firms, debt collectors, mortgage companies and other financial entities.

President Obama appointed Warren, a law professor at the time, as a special adviser in 2010 to set up the bureau. She had been the leading advocate for the agency's creation.