CFPB Transparency Lacking: Report
The Consumer Financial Protection Bureau should give the public access to more of its meetings and hearings to increase transparency, including access to Credit Union Advisory Council meetings, according to a new report released Tuesday by the Bipartisan Policy Center.
Excluding the public from such events has limited the ability of both consumer groups and industry members to participate in the policymaking process, the report said.
“One day after its June 6, 2013 forum—titled, ‘Life of a Debt: Data Integrity in Debt Collection’—the CFPB held an ostensibly public follow-up meeting. The meeting, however, was open only to those consumer groups, industry members and government officials who received a personal invitation from the CFPB,” said the center’s report called, “The Consumer Protection Bureau: Measuring the Progress of a New Agency.”
“Similarly, on June 5, 2013, the CFPB’s Credit Union Advisory Council held a closed-door meeting via teleconference to discuss payday lending practices and recent revisions to the QM rule,” the report said. Members of the advisory council have told Credit Union Times the CFPB has prohibited them from talking to the press about their meetings.
The review also criticizes the CFPB for not publishing notices of its field hearings in the Federal Register, the official journal of the U.S. federal government.
The CFPB has mentioned upcoming hearings on its blog, but the postings often occurred just a few days in advance of a hearing, and often did not contain the level of disclosure typically found in Federal Register notices from other regulators, the Bipartisan Policy Center said. The report also said there have been instances where the CFPB did not provide any notice at all of public hearings, specifically a Feb. 22, 2012 hearing on overdraft fees in New York City.
“Criticism has been expressed about the selective manner in which the CFPB releases its regulations and guidance,” the report also found.
Rick Fischer, senior partner at the Washington-based law firm Morrison & Foerster, and Eric Rodriguez, vice president of research, advocacy and legislation at the National Council of La Raza, also based in Washington, authored the report. The two wrote that they have “heard of examples of select members of the media being provided copies of final regulations and guidance, on an embargoed basis, well in advance of distribution to consumer groups and other market participants.”
The authors argued that “while this practice by itself may not ultimately change how consumer groups and covered entities respond to new regulations, it suggests a lack of even-handedness that is inconsistent with the CFPB’s stated goal of full transparency.”
Fischer and Rodriguez are the co-chairs of the Bipartisan Policy Center’s Financial Regulatory Reform Initiative Consumer Protection Task Force.
The center’s Financial Regulatory Reform Initiative met with the CFPB, leading consumer advocates, federal and state bank regulators, and regulated bank and non-bank industry participants during the course of their review.
The CFPB was created under Dodd-Frank Act, which was signed into law by President Obama in 2010. Obama nominated Richard Cordray as the CFPB’s first director in July 2011. President Obama installed Cordray through a recess appointment in January 2012 and the Senate ultimately confirmed him this past July.