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Another shakeup at the Consumer Financial Protection Bureau

Mick Mulvaney, interim director of the Consumer Financial Protection Bureau, has essentially dismantled an important part of the agency: its Consumer Advisory Board. The Board was set up to help the CFPB work with consumer groups in an effort to identify situations where consumers are being treated unfairly by banks and lenders.

In a letter to members of the board, the CFPB said it plans to "reconstitute" the board into one or more new, smaller consumer advisory groups. This, the agency said, is to facilitate streamlined, productive discussions about policy priorities and needs.

"It's quite clear that we've been fired," said a Suffolk University law professor and member of the Consumer Advisory Board.

Another called the move a "huge red flag in this administration's ongoing erosion of critical consumer financial protections that help average families. Apparently Acting Director Mulvaney is willing to listen to industry lobbyists who make campaign contributions, but not the statutorily appointed Consumer Advisory Board members."

This is not the first time there have been red flags at the agency, according to many consumer advocates. One was the interim appointment of Mulvaney himself, as the former congressman once sponsored legislation to abolish the agency. Since his interim appointment, he has taken steps to reduce the agency's role as a watchdog, tried to shut down a popular consumer complaint database, and delayed new regulations on payday lenders. He also dropped a CFPB investigation into a payday lender that had given to one of his campaigns.

"The Bureau has not fired anyone," a CFPB spokesperson responded to Board members' complaints. In a statement, he added that "the outspoken members of the Consumer Advisory Board seem more concerned about protecting their taxpayer funded junkets to Washington, DC and being wined and dined by the Bureau than protecting consumers."

The Suffolk University law professor seemed stunned and affronted at her work with the board being characterized as "junkets." Another member stated that he and several other members would have "happily shouldered the cost" for their travel and incidentals if that would have preserved the integrity of the Board.

The CFPB spokesperson affirmed that the agency intends to meet its statutory obligation to convene meetings of a consumer advisory board.

What does this mean for consumers? It's not entirely clear. Whether or not the CFPB will work effectively to protect the interests of consumers, however, consumer protection attorneys will be ready to do so.

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