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  • CFPB complies with settlement agreement in FACA dispute over consumer financial law taskforce

    Federal Issues

    On March 28, the CFPB filed its final status report detailing measures taken by the agency to remedy the Bureau’s Taskforce on Federal Consumer Financial Law’s stipulated violations of the Federal Advisory Committee Act (FACA). As previously covered by InfoBytes, in January the Bureau publicly announced that it settled a lawsuit filed by several consumer advocacy groups against the agency, which claimed that the taskforce was “illegally chartered” and violated FACA. The consumer advocacy groups claimed that the taskforce—which was established by the Bureau in 2019 under former Director Kathy Kraninger to provide recommendations to improve consumer financial laws and regulations—lacked balance, and that appointed members who “uniformly represent industry views” have worked on behalf of several large financial institutions or work as industry consultants or lawyers. Last year, the parties entered a stipulated settlement in the U.S. District Court for the District of Massachusetts (covered by InfoBytes here) in which the Bureau agreed to take several measures, including releasing all taskforce records, amending the taskforce’s final report to include a disclaimer that a January 2021 final report (covered by InfoBytes here) was produced in violation of FACA, and providing status reports until the Bureau has come into full compliance. The final status report certified to the court and the consumer advocacy groups that the Bureau has complied in full with the terms of the agreement.

    Federal Issues CFPB Courts Taskforce Federal Advisory Committee Act

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  • CFPB settles FACA dispute over taskforce

    Federal Issues

    On January 14, the CFPB announced publicly that it settled a lawsuit filed by several consumer advocacy groups against the CFPB, which claimed that the Bureau’s Taskforce on Federal Consumer Financial Law established under former Director Kathy Kraninger was “illegally chartered” and violated the Federal Advisory Committee Act (FACA). The consumer advocacy groups alleged that the taskforce—established by the Bureau in 2019 to provide recommendations to improve consumer financial laws and regulations—lacks balance, and that the appointed members who “uniformly represent industry views” have worked on behalf of several large financial institutions or work as industry consultants or lawyers. (Covered by InfoBytes here.) Last November, the parties entered a stipulated settlement in the U.S. District Court for the District of Massachusetts, in which the parties agreed that the Bureau failed to comply with FACA in its establishment and operation of the taskforce. As previously covered by InfoBytes, the stipulated settlement required the Bureau to, among other things, (i) release all taskforce records; (ii) amend the final report to include a disclaimer that the report was produced in violation of FACA; (iii) relocate the taskforce webpage and remove the current version of the report from its website; (iv) issue a press release by January 17, 2022, notifying the public of the settlement agreement; and (v) provide status reports until the Bureau has come into full compliance. In its January 14 press release, in addition to publicly announcing the settlement agreement, the CFPB also reported that all Taskforce records would be made available on the CFPB’s website and that the Bureau had amended the Taskforce’s report to include the requirement disclaimer.

    Federal Issues Courts CFPB Taskforce Federal Advisory Committee Act

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  • CFPB agrees taskforce was illegally chartered

    Courts

    On November 29, the parties reached a stipulated settlement in an action filed by several consumer advocacy groups against the CFPB, which claimed that the Bureau’s Taskforce on Federal Consumer Financial Law established under former Director Kathy Kraninger was “illegally chartered” and violated the Federal Advisory Committee Act (FACA). The consumer advocacy groups’ complaint alleged that the taskforce—which was established by the Bureau in 2019 to examine the existing legal and regulatory environment facing consumers and financial services providers—lacks balance, and that the appointed members who “uniformly represent industry views” have worked on behalf of several large financial institutions or work as industry consultants or lawyers. (Covered by InfoBytes here.) This composition, the consumer advocacy groups argued, undermines the purpose of the taskforce and is a violation of FACA and the Administrative Procedure Act. The complaint also stated that while FACA requires advisory committee meetings to be open to the public and that records be disclosed, the taskforce has held closed-session meetings without providing public notice and has failed to make available any of the records related to these meetings or its other work.

    Under the terms of the stipulated settlement filed in the U.S. District Court for the District of Massachusetts, the parties agreed that the taskforce “was subject to FACA because it was ‘established’ and ‘utilized’ by the Bureau ‘in the interest of obtaining advice or recommendations.’” The parties also stipulated that the Bureau failed to comply with FACA in its establishment and operation of the taskforce, including by releasing a two volume report in January containing recommendations for modernizing the consumer financial services marketplace (covered by InfoBytes here) without being produced by a FACA-compliant advisory committee. The stipulated settlement agreement requires the Bureau to, among other things, (i) release all taskforce records; (ii) amend the final report to include a disclaimer that the report was produced in violation of FACA; (iii) relocate the taskforce webpage and remove the current version of the report from its website; (iv) issue a press release by January 17, 2022, notifying the public of the settlement agreement; and (v) provide status reports until the Bureau has come into full compliance.

    Courts CFPB Taskforce Federal Advisory Committee Act Settlement Administrative Procedures Act

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  • Consumer advocacy groups claim CFPB taskforce is illegally chartered

    Courts

    On June 16, several consumer advocacy groups filed a lawsuit in the U.S. District Court for the District of Massachusetts against the CFPB claiming that the Bureau’s Taskforce on Federal Consumer Financial Law was “illegally chartered” and violates the Federal Advisory Committee Act (FACA). As previously covered by InfoBytes, the taskforce was established last year to examine the existing legal and regulatory environment facing consumers and financial services providers. As also covered by InfoBytes, the taskforce recently outlined its future plans, which include analyzing comments received from a March request for information, holding a public hearing, and participating in public listening sessions with the Bureau’s four advisory committees. The complaint argues, however, that the taskforce’s membership lacks balance, and that the appointed members who “uniformly represent industry views” have worked on behalf of several large financial institutions or work as industry consultants or lawyers. This composition, the consumer advocacy groups argue, undermines the purpose of the taskforce and is a violation of FACA and the Administrative Procedure Act. The complaint also states that while FACA requires advisory committee meetings to be open to the public and that records be disclosed, the taskforce has held closed-session meetings without providing public notice and has failed to make available any of the records related to these meetings or its other work.

    The complaint seeks declaratory and injunctive relief and asks the court to (i) set aside the taskforce’s charter, all orders and decisions, and the appointments of the taskforce members; (ii) enjoin the taskforce from meeting, or otherwise conducting taskforce business; (iii) order the Bureau to immediately release all materials prepared for the taskforce; and (iv) enjoin the Bureau from relying upon taskforce recommendations or advice. The complaint also seeks costs and attorneys’ fees.

    Courts CFPB Taskforce Federal Advisory Committee Act

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