by Jeff Sovern
It feels as if there has been a steady stream of op-eds attacking Mulvaney's decision to fire the CFPB's Consumer Advisory Board members. We've posted links here and here and I commented here. A couple more links appear below. But usually someone outside the Bureau defends Mulvaney's acts. Where are they this time (you can post links in the comments)?
As for the new op-eds, they are both by industry folks. One is authored by lawyer, Joane Needleman of Clark HIll who formerly served on the CAB has an op-ed here. I'm pasting in an excerpt, but because I don't want to quote too much, I left out some parts worth reading and so recommend clicking on the link to read the whole piece. In particular, I'm not sure Ms. Needleman's tone comes through in the words below.
At my last CAB meeting in June of 2017, retiring members were asked to say a few words about their experiences. I thanked the Bureau staff who were an incredible team of dedicated public servants that had the daunting task of “schlepping” board members from one meeting to the next and coordinating travel schedules and logistics; all with a smile and with impeccable precision. I thanked Director Cordray and complimented him on his leadership of the Bureau. Despite our well-documented differences, he did his job very well. * * *
I was disappointed to learn this week that Acting Director Mulvaney has “fired” not only the current CAB but the current Advisory Boards for Community Banks and Credit Unions. As the Acting Director and under the current structure of the Bureau, terminating these board members seems to be within his authority, but it was not the right thing to do. The Bureau’s press release, issued shortly after members were informed that they were relieved of their services, suggested that the Acting Director wanted to “transform the way the Bureau engages.” I support that decision but a lack of engagement was certainly not a characteristic of the current and past CAB members and certainly not a basis to terminate them. If anything CAB members looked forward to and always desired an open dialogue with the Bureau.
In the past 6 months, many CAB members had disagreements with certain Bureau activities much like I did during my tenure, but I was never asked to leave. Advisory boards cannot and should not be a rubber stamp; if they were, they would serve no purpose. Could the activities of the CAB and their engagement with the Bureau have been improved? Of course. But start with the existing group that understands how to make the process better. * * *
Problems do not get solved by one-sided viewpoints. The fear of compromise serves only to further divide us. I wish my CAB colleagues well and hope that we can one day again meet in the middle.
The other piece is by Arjan Schütte, founder and a managing partner of Core Innovation Capital, and appears in The American Banker. Here's an excerpt:
I was fired from the Consumer Financial Protection Board’s Consumer Advisory Board last week, along with all of its other members. Why? Because the acting head of the bureau, Mick Mulvaney, appears intent on running the consumer protection bureau into the ground while claiming a lack of “global perspective” and wanting a “fresh start.”
Never mind that this board has been the most diverse it has ever been — split about evenly between consumer advocates and business people (with some academics thrown in for good measurement). If Mr. Mulvaney was concerned the board was only wild-eyed consumer protection activists, he didn’t appear to notice executives from industry giants Citi, Discover, FICO, Mastercard and PNC. Or if he really cared about private sector innovation, as he claims, he missed the presence of fintech legend Max Levchin, TrueAccord’s Ohad Samet, NerdWallet’s Tim Chen, Oportun’s Raul Vazquez (both of the latter being Core portfolio companies, for disclosure) and myself.
* * *
Yes, our financial regulatory system is a messy patchwork of state and federal agencies. Yes, the industry is spending way too much on compliance, shuffling way too much paperwork. Yes, I think the CFPB overused its stick relative to its carrots in the past. * * *
* * *
[E]very rule in place today is a response to incredible harm done to hardworking Americans by greedy, unscrupulous, short-sighted and sometimes outright criminal actors in finance. * * *
* * * I believe financial products are sufficiently complex and materially impactful on people’s lives and livelihoods that having a consumer watchdog is entirely warranted — even if it is a pain the ass, a cost to the system, and a drag on innovation. The stakes are just too damn high, for each household and for our country.
[W]hat is perhaps to me the most annoying: Even a conservative, limited-regulation leadership can express itself in smart governance and shifting priorities; it does not need to resort to spreading organizational cancer.
[HT: Kathleen Engel]