Trump's consumer financial chief disbands key advisory boards

WASHINGTON (Reuters) - Mick Mulvaney, the interim head of the Consumer Financial Protection Bureau, has disbanded three boards whose members include consumer advocacy groups and which advise on policy at the financial watchdog, board members said on Wednesday.

FILE PHOTO: Office of Management and Budget Director Mick Mulvaney testifies before the House Appropriations Subcommittee on Financial Services and General Government on Capitol Hill in Washington, U.S., April 18, 2018. REUTERS/Aaron P. Bernstein

The decision to dismantle the boards was communicated to members via an email and conference call on Wednesday, the members said. It drew sharp criticism from board members, who said the change would shut out those who are familiar with the problems faced by ordinary Americans.

The decision forms part of a broader overhaul of the agency by Mulvaney, who says the CFPB, which was conceived to stamp out abusive lending after the 2007-2009 financial crisis, is too powerful and has overstepped its statutory mandate.

The bureau told members it was disbanding the Consumer Advisory Board (CAB), which is required by law to meet twice a year, as well as the Community Bank Advisory Council and the Credit Union Advisory Council, in order to save costs.

The CFPB plans to reconvene the boards with fewer members in the fall, and instead increase outreach to the public via events in Washington and elsewhere, former board members said.

“Firing the current CAB members 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,” Ann Baddour, CAB chair, said in a statement.

The bureau said the advisory boards would continue to function.

“The Bureau will continue to meet its statutory obligation to convene the Consumer Advisory Board meetings as well as enhanced forms of public outreach and engagement,” including town halls and round tables, John Czwartacki, a spokesman for the bureau, said in a statement.

But former board members expressed concern that Mulvaney would rely on industry voices in any new panels and miss out on looming consumer woes.

“It’s not enough to just ignore us. They want us to go away. We are the ones who hear what’s happening on the ground,” said board member Chi Chi Wu, an attorney with the National Consumer Law Center.

Mulvaney, a former Republican congressman who also serves also White House budget chief, was appointed by President Donald Trump in November to head the CFPB and has promised to help fulfill the president’s pledge to cut regulations.

Under Mulvaney’s watch, the CFPB has dropped cases against payday lenders, put on ice a probe into credit-monitoring firm Equifax Inc, eliminated an office dedicated to student loans, and is weighing whether to drop other enforcement actions, Reuters has reported.

Mulvaney has said he intends to invalidate rules that would significantly curb payday lending as soon as possible.

Reporting by Michelle Price and Pete Schroeder; Additional reporting by Patrick Rucker; Editing by Leslie Adler