Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, fired the agency's 25-member advisory board on Wednesday and said he would launch a new panel in the fall.
The Consumer Advisory Board has played an influential role in advising the bureau's leadership on new regulations and policies. But some members of the panel, which includes prominent consumer advocates, academics and industry executives, had begun to complain that Mulvaney was ignoring them and making unwise changes at the watchdog agency.
On Monday, 11 advisory board members held a news conference where they criticized Mulvaney for, among other things, canceling legally required meetings with the group.
On Wednesday, the group members were notified that they were being replaced -- and that they could not reapply for spots on the new board.
The bureau will launch a new board in the fall with fewer members, the bureau said in an email to the group.
"Your participation to date reflects a true commitment to public service and ensures that the Bureau's policy making has had the benefit of your perspectives and experiences on issues important to consumers across the country," the email said.
Mulvaney told the board members that his decision to reshuffle the panel was driven by efforts to cut costs across the agency.
In a statement, the bureau said the changes are part of "a new strategy to increase high-quality feedback" and that the agency will continue to fulfill its obligations to seek input from outside groups, but with "new, smaller memberships" to ensure streamlined discussions.
Former board members say the cost-saving arguments are misleading. The board's cost was several hundred thousand dollars, according to bureau officials, compared with the bureau's estimated budget of $630.4 million for fiscal 2018. Several members -- including Max Levchin, founder and CEO of financial services company Affirm -- offered to pay their own travel costs if there were concerns.
Along with consumer groups and academics, the board was made up of representatives from big financial companies like Citigroup, Mastercard, and Pennsylvania-based bank PNC.
The dismissal of the current group's members is likely to exacerbate concerns among Democrats that Mulvaney is weakening the consumer watchdog agency. He has launched a top-to-bottom review of its operations, stripped enforcement powers from a bureau unit responsible for pursuing discrimination cases, and proposed that lawmakers curb the agency's powers.
Last week, Mulvaney sided with payday lenders who sued the bureau to block implementation of new industry regulations. The bureau filed a joint motion with the payday lenders asking the judge to delay the case until the bureau completes a review of the rules, which could take years.
"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," said Chi Chi Wu, an attorney for the National Consumer Law Center who has been a board member since 2016. "Apparently acting Director Mulvaney is willing to listen to industry lobbyists who make campaign contributions, but not the statutorily appointed Consumer Advisory Board members."
The Consumer Advisory Board is required under the 2010 financial overhaul law known as the Dodd-Frank Act. Current members include Wu as well as the head of retail banking at Citi, the founder of NerdWallet, and a director at Texas Appleseed, a public interest law center.
The board met with Mulvaney's predecessor, Richard Cordray, three times a year, according to several members. But Mulvaney repeatedly canceled meetings, citing his busy schedule. In addition to leading the bureau, Mulvaney is the director of the White House Office of Management and Budget.
In a call with some of the advisory board members Wednesday morning, a bureau official told them that they could not reapply to sit on the board.
Their dismissal "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," said Ann Baddour, chairman of the advisory board and director of the Fair Financial Services Project at Texas Appleseed.
Information for this article was contributed by Renae Merle of The Washington Post, by Elizabeth Dexheimer of Bloomberg News and by Ken Sweet of The Associated Press.
Business on 06/07/2018