In a sweeping move, Consumer Financial Protection Bureau acting director Mick Mulvaney on Wednesday fired the bureau’s entire 25-member Consumer Advisory Board.
A CFPB official told the board — comprised of prominent legal advocates, financial services executives, and other industry stakeholders — on a conference call that they were being dismissed and could not reapply for their positions, according to a report from Politico.
“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,” the official, policy associate director for external affairs Anthony Welcher, said on the call, per Politico; Welcher also added that the CFPB intends to convene a new board.
The move strikes a serious blow to one of the bureau’s key organs, which is required by law to meet twice per year and “provide information on emerging practices in the consumer financial products industry, including regional trends, concerns, and other relevant information,” according to the board’s charter.
On the same day, the CFPB also dissolved the Community Bank Advisory Council and the Credit Union Advisory Council, Reuters reported.
Welcher in part described the decision to begin “streamlining” the CFPB and its multiple advisory boards was a way to save money.
Late last year, former CFPB director Richard Cordray used a meeting of the CAB to promote the bureau’s recent report on using reverse mortgages to delay Social Security — a strategy that the CFPB claimed wasn’t worth it for many borrowers.
“The report responded to the increasing promotion of this strategy by financial writers and those in the reverse mortgage industry, often without discussing the risks involved,” Cordray told the CAB in Tampa, Fla. last November.
Cordray later resigned to pursue the Ohio governorship, with Trump appointee Mick Mulvaney taking his place after a contentious transfer-of-power period. Mulvaney then proceeded to take several steps to weaken the bureau’s power, including declining funding from the Federal Reserve, issuing a substantially shorter semi-annual report to Congress than his predecessor, and declaring the end of “regulation by enforcement” in testimony before the House Financial Services Committee.
At least one former member was upset at Mulvaney’s action.
“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,” Chi Chi Wu of the National Consumer Law Center told Politico.
Written by Alex Spanko