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Republican Leaders Demand Answers on CFPB’s Shady Policy Fellowship Program

Washington, May 13 -

This week, the top Republican on the House Financial Services Committee, Patrick McHenry (NC-10), the top Republican on the Subcommittee on Oversight and Investigations, Tom Emmer (MN-06), the top Republican on the Subcommittee on Consumer Protection, Blaine Luetkemeyer (MO-03), and the Vice Ranking Member of the Subcommittee on Oversight and Investigations, William Timmons (SC-04), sent a letter to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra.

The letter calls on Director Chopra to provide detailed information regarding the CFPB’s opaque Policy Fellowship program. This request follows revelations that Director Chopra hand-picked several personal associates for the high-paying program, at least one of whom assisted Chopra’s improper power grab to take control of the Federal Deposit Insurance Corporation’s agenda from then-Chair Jelena McWilliams.

Read the full letter to Director Chopra here.

Read key excerpts from the letter:

“Dear Mr. Chopra:

“Last year, Acting Director Dave Uejio launched the Consumer Financial Protection Bureau’s Policy Fellowship to enhance expertise ‘on the markets for consumer financial products and services that affect American consumers.’ The Committee has obtained information that raises questions and concerns regarding the adequacy of the fellowship program’s compliance with ethics guidelines, among other things. Moreover, the salaries and job responsibilities for current CFPB Fellows are analogous to those of the Bureau’s senior political and career staff. This creates the appearance that the program is being used as a backdoor to circumvent civil service laws and Executive Branch guidance that prohibit preferential hiring and conflicts of interest.

…

“The Bureau does not publicly identify or disclose the roster of Fellows, as it does for senior political and career staff. Fellows also appear to be exempt from filing the financial disclosures required for many Presidentially appointed, Senate confirmed positions. As you know, financial disclosures are an essential window into how the federal government is using taxpayer dollars. The disclosures contain information about the personal financial interests of the filer, the filer’s spouse, and any dependent children The only publicly available indicator, in some cases, that a Fellow has any affiliation with the CFPB occurs on the Fellow’s social media channels.

“We have concerns about the opaqueness of the Policy Fellowship Program, which are borne out by documents and emails that show an individual hired as a Fellow appeared to play a key role in the CFPB’s attempt to co-opt the FDIC’s agenda as it relates to bank mergers. On November 26, 2021, a CFPB Fellow circulated a Notational Voting Sheet and other materials to the FDIC Board of Directors. Two weeks later the Fellow declared ‘the Board has approved all matters in NV-2021-12.’  As you know, this sham vote was contrary to instructions from the FDIC’s office of general counsel during a dispute about the Board’s bylaws. The fact that a Fellow managed the process by which the CFPB upended the FDIC’s 88-year tradition of considering the Chairman’s agenda on a collegial basis is disturbing. It creates the appearance that some Fellows are exceeding the scope of the program’s stated purpose, at the very least.

“Furthermore, on April 27, 2022, you testified to the Committee that applicants for the Policy Fellowship went through a ‘competitive process’ and that you ‘encouraged a lot of people to apply’ and knew ‘a handful’ of Fellows prior to becoming the Director of the CFPB.  That dynamic invites questions as to whether there was favoritism in the selection process, and the opacity of the program leaves taxpayers and supervised entities without easy access to answers. It also is unclear whether Fellows are subject to the CFPB’s guidance ‘to protect the public trust and detect revolving door misconduct’ which requires staff to report ‘suspicious communications and activity.’ The guidance directs current employees to file reports with agency ethics officials if they learn a former employee is assisting a party under investigation, among other things.”

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