Here’s kind of a neat twist: the Consumer Financial Protection Bureau wants public input for nominations to a Consumer Advisory Board, an outside group of experts who will advise CFPB on the emerging consumer protection challenges and the desired focus of the agency.
One way that the Dodd-Frank Wall Street Reform and Consumer Protection Act makes sure that we hear from a variety of experts with a variety of viewpoints is by requiring us to set up the Consumer Advisory Board. Today, we begin the process of setting up the Board to advise us and consult with us on consumer financial issues. Board members will provide the Bureau with information about emerging trends and practices in the financial-services and financial-products industries.
We are looking for Board members with diverse perspectives and innovative ideas. These nominees may have a background in one or more of the following areas: consumer protection, financial services, fair lending, civil rights, consumer financial products and services, or community development. If you or someone you know can offer us expert advice in any of these fields, let us know by submitting a nomination letter and a complete resume/CV to CABnominations-at-cfpb-dot-gov by March 30, 2012.
All you have to do to know this is a good idea is to look at the last consumer advisory board, as Zach Carter does. This one was housed in the Federal Reserve, which had the prior monitoring responsibility over many consumer financial protection laws. And it consisted mainly of corporate executives with little interest in protecting the consumer. That nomination process was largely available only to insiders. CFPB has opened it up to everyone.
In 2006, the Fed’s consumer advisory council included officials from JPMorgan Chase, Wachovia, Countrywide, and Option One — companies that were all heavily involved in the sale of subprime mortgages. Seven other banking executives, a MasterCard lawyer, a Wal-Mart vice president and the marketing chief for consumer credit score company Equifax were also on the board, alongside community development advocates and consumer attorneys.
When members of the board did in fact suggest during the heyday of subprime mortgages that the central bank take action against abuses, the Fed simply ignored the advice.
This crowdsourcing fits with Elizabeth Warren’s initial vision for the CFPB. They take public input seriously, always opening up the process, whether on new disclosure forms or asking about practices by the financial industry. As a new agency, it shows a comfort with using technology and social media to enhance its effectiveness. And while CFPB has so far been working at the margins, with new mortgage disclosure forms, investigations on overdraft fees and proposed regulation of debt collectors among other projects, I think it’s been very visible and effective in establishing a culture of attentiveness. Hopefully the follow-through will match the rollout.