The taskforce, created by the bureau in 2019, had allegedly violated the law that seeks to ensure transparency by federal agency advisory committees.
01/17/2022 12:30 P.M.
2 minute read
The Consumer Financial Protection Bureau’s Taskforce on Consumer Financial Law, created to examine the existing legal and regulatory environment facing consumers and financial services providers, is subject to corrective actions after the bureau settled a lawsuit that it did not comply with the Federal Advisory Committee Act (FACA).
The lawsuit was filed by the National Association of Consumer Advocates, U.S. Public Interest Research Group and Professor Kathleen Engel.
FACA is a “sunshine” law that seeks to ensure that there is adequate transparency into agency advisory committees, according to a news release from the CFPB. When enacting FACA in 1972, Congress was concerned that special interest groups might use their committee membership to advance their private financial concerns.
In October 2019, the CFPB chartered the taskforce to provide recommendations to improve consumer financial laws and regulations. The taskforce released its report and recommendations in January 2021.
The report consists of approximately 100 recommendations to the bureau, Congress and state and federal regulators, including recommendations that reflect preventing regulation by enforcement, ACA International previously reported.
The task force’s report “uses five interrelated principles that serve as the foundation for proposed systematic changes to the current legal and regulatory framework: consumer protection, information and education, competition and innovation, regulatory modernization and flexibility, and inclusion and access.”
On Nov. 29, 2021, the CFPB entered into a stipulated settlement agreement that required, among other corrective actions, the CFPB to release to the plaintiffs by March 22, 2022, all taskforce records that would have been made public if the CFPB had complied with FACA’s requirements, according to the CFPB news release.
These records will also be made publicly available on the CFPB’s website.
Additionally, the CFPB has amended the taskforce’s report to include a disclaimer noting that the CFPB failed to comply with FACA and that the report should not be relied upon as a “product of a FACA-compliant federal advisory committee.”
The U.S. District Court for the District of Massachusetts denied the bureau’s partial motion to dismiss the case for lack of jurisdiction on Feb. 21, according to the settlement agreement.
The plaintiff’s stipulated that the taskforce was subject to FACA because it was created and used by the bureau to obtain “advice or recommendations.”
The bureau will also move the taskforce’s webpage from the rules and policies section on its website to the advisory committee page.
For more information, please visit the CFPB’s webpage on its open government activities.
To receive notifications about ACA content—including member alerts, upcoming events and new products—text ALERTS to 96997.
Message and data rates may apply. Message frequency will vary. To opt-out at any time, reply STOP to any message we send.
ACA International members are welcome to submit news items for possible publication to [email protected].