Report: Greater Input Helps CFPB Avoid Missteps (Sept. 24, 2013)
The Consumer Financial Protection Bureau (CFPB) is most successful when it solicits wide-ranging input before issuing guidance; when the agency doesn’t is when it could falter, according to a new report by the nonprofit organization Bipartisan Policy Center (BPC).
“When the CFPB has used not only its own research, but also an open process that enables broad and deep input, the quality of decision-making has been good,” the report maintains. “However, when the bureau has used a closed-door process to issue guidance and has not broadly gathered input from stakeholders, quality has suffered.”
The report, “The Consumer Financial Protection Bureau: Measuring the Progress of a New Agency,” points to rulemaking for remittance transfer providers as an example of the CFPB demonstrating “flexibility, a willingness to hear concerns and an ability to make revisions and corrections to initial proposals—and even to ‘final’ rules—to address practical issues in the marketplace.” An area where the CFPB should be more transparent and solicit more outside input is with the Consumer Financial Civil Penalty Fund, which consists of the civil penalties the bureau imposes on financial institutions, according to the report. The CFPB could not be reached for comment.
The report, which reviews the CFPB’s performance and provides more than 30 specific findings and recommendations for the agency and Congress, among others, is part of the BPC’s Financial Regulatory Reform Initiative. The initiative’s objective is to analyze the Dodd-Frank Act to determine its effectiveness, as well as to provide recommendations.