Report Recommends CFPB Improve Transparency
The Consumer Financial Protection Bureau should increase transparency in a number of ways, according to a new report released Sept. 24 by the Bipartisan Policy Center.
“A range of stakeholders, including both consumer groups and industry representatives, have suggested the CFPB should increase transparency by improving its process for conducting public hearings and meetings, including providing adequate notice for such hearings and meetings,” said the center’s report entitled, “The Consumer Protection Bureau: Measuring the Progress of a New Agency.”
Specifically, the report said 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. Members of the advisory council told Credit Union Times they were prohibited by the agency from speaking to the press about the meeting.
The report also said the CFPB has not published notice of any 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 “these postings often have occurred just a few days in advance of a hearing and often do not contain the level of disclosure typically found in Federal Register notices from other regulators,” the report said. (See coverage of the CFPB’s Sept. 25 field hearing in Madison on page 1.)
The report also said the CFPB additionally did not provide any notice for some public hearings, specifically the Feb. 22, 2012 hearing on overdraft fees in New York City.
Excluding the public has limited the ability of both consumer groups and industry members to participate in the policymaking process, the report found.
“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,” the report said.
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, were authored the report.
The two said in the report 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 argue 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.
Credit Union Times asked the CFPB if it agrees with the Bipartisan Policy Center report’s recommendations to increase transparency.
“As the CFPB works to carry out its mission of promoting fair and transparent markets for consumers and responsible businesses, the Bureau welcomes feedback from all stakeholders,” said a CFPB spokesperson.
CUNA told Credit Union Times the CFPB should improve transparency.
“Much like any regulatory agency, the CFPB should follow the best practices and guidelines for their mission, including taking measures for adequate transparency and notice for important hearings and meetings,” said Paul Gentile, executive vice president, strategic communications and engagement.
The center’s Financial Regulatory Reform Initiative met with the CFPB, leading consumer advocates, federal and state bank regulators, and regulated industry participants in the bank and nonbank space during the course of its review.
The CFPB was created under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which President Obama signed into law on July 21, 2010.