Very few people took notice when Consumer Financial Protection Bureau (CFPB) acting director David Uejio tweeted in June 2021 that the bureau wanted to start using policy fellows to keep consumer financial markets “fair, transparent and competitive.” Uejio stated that the fellowships were important because of COVID-related economic shocks. Yet, it appears that CFPB avoided key federal transparency laws by failing to identify these fellows, their full job responsibilities, and, most importantly, who funded the fellowships. The process undertaken to hire these fellows appears to be unfair, non-transparent, and non-competitive.
The fellowship program involved appointments to two-year terms that could be extended to four years, with one track focusing on markets and policy. The official job description for the Senior Markets & Policy Fellow said the work covered everything from the “capacity, opportunities, and constraints” for policy and helping staff plan and build out policy priorities. Other fellows were tasked with data collection and analysis on topics including consumer financial technology, small business lending, and financial institution data and core processing systems. The program director organized and ran working groups analyzing “major policy-making issues and initiatives.”
The second track involved engagement and policy inside the Office of Consumer Education. Duties involved developing “engagement campaigns and strategies,” looking at debt collection and repair, student loans, and small-dollar lending “related to or targeting special populations.” Analysts would look for gaps and obstacles before producing population engagement ideas. These Senior Fellows were tasked with coming up with short and long-term policy goals before meeting with other CFPB divisions on how to assist in identifying what special populations need “in all areas of Bureau policymaking.” Certain fellows in both tracks could make up to $240,000 per year, more than some cabinet secretaries and even CFPB Director Rohit Chopra.
Chopra later told the U.S. House Committee on Financial Services that he knew “a handful” of the fellows and “encouraged a lot of people to apply” but swore that they weren’t political appointees. He was hesitant to reveal whether the fellows had financial disclosures or outside earned income bans, only saying that he would investigate the questions.
Investigations did not change the fact that a shroud of secrecy still hovered over the entire CFPB fellowship process. House Republicans sent a letter to Chopra last Spring asking why the bureau failed to identify the fellows or disclose whether favoritism played a factor in the selection process. The U.S. Chamber of Commerce Litigation Center sent correspondence last summer, accusing the fellowship program of getting around civil service laws and executive branch guidance on conflicts of interest. It called for either reform of the program or shutting it down entirely. Perhaps unsurprisingly, the CFPB Policy Fellowship page was later removed from CFPB’s website.
However, a number of questions remain about the scuttled fellowship program. The first concern was why Uejio announced the fellowship program more than a week after the applications were online. The timeline suggests CFPB already had candidates in mind when they launched the program, as opposed to finding the most qualified candidates.
Who provided the funds for the CFPB fellowship program is also unknown. There are legitimate reasons to think that a private donor funded at least part of the fellowship. For example, if a wealthy progressive individual or organization donated the funds for these positions, consumers could expect a litany of high tax policy suggestions that could burden businesses and consumers, and the CFPB is certainly delivering.
Given the influence CFPB exerts over public policy, it is important that oversight authorities get to the bottom of this question to determine whether biased motivations drove decision-making at CFPB during this time. It is especially so considering the lofty salaries and vital roles some of these fellows played at the agency.
One way to answer these questions and prevent this from happening again is to put CFPB under congressional appropriations. CFPB is one of a handful of agencies not subject to legislative budgetary requests because its funding comes from the Federal Reserve. However, if the CFPB is going to show such blatant disregard for basic oversight and transparency, it may be time to end this arrangement. If CFPB leadership does not come clean, Congress must ensure that it does so.
Policy decisions that affect virtually all businesses and consumers should be unbiased and the identity (and agenda) of anybody with influence in these decisions needs to be disclosed.
Patrick Hedger is Executive Director of the Taxpayers Protection Alliance.