Consumer Bureau’s Acting Chief Purges Its Advisory Boards

Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, was expected to meet on Wednesday with members of its consumer advisory board, which provides feedback on the bureau’s rules and policies.

Instead, one of his deputies dismissed the board’s members.

By law, the bureau must convene the advisory board and hold at least two in-person meetings with its members a year. The bureau canceled a meeting scheduled for February, and last week it canceled one planned for this week.

In place of that meeting, the bureau gathered the board’s members for a conference call Wednesday and effectively fired them. The call was led by Anthony Welcher, who, as one of Mulvaney’s deputies, oversees external affairs for the bureau.

Welcher told those on the call that the board, which has 25 volunteer members, would be reconstituted as a smaller group.

The consumer advisory board’s members are consumer activists, academics, entrepreneurs who run financial startups and industry representatives from companies including Citi, Discover and Mastercard. Also participating on the call Wednesday were members of two other groups that advise the bureau, one representing credit unions and the other representing community banks.

“We suspected this might be coming,” said Josh Zinner, a member of the consumer advisory board and the chief executive of the Interfaith Center on Corporate Responsibility. “This is a further signaling that the new leadership is almost obsessively dismantling the bureau’s accomplishments and taking it in a decidedly different, industry-friendly direction.”

The three groups’ members — many of whose terms were to last one to two more years — were told those terms would end this year and that reapplying for membership next year was not an option, according to an audio recording of the call obtained by The New York Times.

Welcher initially said the bureau was altering the boards based on feedback it had received during a recent call for public comments about its interactions with outside parties, according to the audio recording.

But the comment period ended only last week, those on the call Wednesday noted, and none of the comments released publicly have suggested disbanding the advisory boards. A review of the public comments shows that many explicitly praised the boards’ work.

Welcher later acknowledged on the call that the bureau’s leaders had been discussing potential changes to the boards even before seeking public comment, and that “in the final review, nothing changed from the direction we were headed.”

He also described the decision as meant to reduce the bureau’s costs. The three groups collectively cost $1.1 million a year to operate, according to their charters. The agency’s annual budget is around $630 million this year.

Participants on the call countered Welcher’s explanation forcefully. Kayce M. Bell, Alabama Credit Union’s chief development officer, said her organization would happily pay her travel costs and expenses for board meetings. Several other callers jumped in to agree, according to the audio recording.

A community banking representative on the call criticized the bureau’s leadership for ousting the group’s members without meeting with them even once.

“The bureau has not fired anyone,” John Czwartacki, a bureau spokesman, said after the call. The agency will meet its legal obligation to convene meetings of the consumer advisory board and current members will be allowed to serve out the year, he said.

The changes to the advisory groups are the latest in a flurry of moves under Mulvaney’s leadership. He is trying to reduce the bureau’s power and responsibilities, which he has previously complained were too broad.