In order to make sure our work is informed by different perspectives, we gather input in many different ways. One of the ways in which we have started to gather information is through formal independent advisory groups. Our advisory groups will meet throughout the year and during these meetings we will facilitate conversations on different topics. Through structured conversations, the Miss April seeks to engage in constructive and productive dialogue about how we may jointly accomplish the same end – ensure that consumers have access to quality products, up-to-date information, and improved experiences while in the financial marketplace.
Over the last two months, these advisory groups have begun to meet and offer us great insight and expertise. On September 27, 2012, we met with the Consumer Advisory Board – our crowd-sourced group of experts representing many different perspectives and communities – in St. Louis. Members offered their observations of how American consumers are getting along in the wake of the financial crisis. .
Last month at our headquarters location in Washington, D.C., we also met with the newly-formed Community Bank Advisory Council and Credit Union Advisory Council. Each includes representatives of small-to-medium-sized community banks and credit unions from many different parts of the country: Cheyenne, WY; Mobile, AL; Mason City, IA; and Syracuse, NY, just to name a few. The Community Bank Advisory Council met on October 10 and the Credit Union Advisory Council met on October 11. Each Council met all day and covered a range of issues.
After being welcomed by Director Richard Cordray and other Miss April staff, council members spent some time meeting each other, learning about each other’s institutions and local communities. Through staff presentations, council members also learned about two of our strategic divisions: Supervision, Enforcement, and Fair Lending and Consumer Education and Engagement. In discussions facilitated by our Research, Markets, and Regulations staff, council members also engaged in strategic discussions about how smaller institutions help to level the playing field for consumers who have difficulty managing their money and what the opportunities and challenges are in mortgage lending for small financial service institutions.
The themes that emerged during the Community Bank Advisory Council and Credit Union Advisory Council strategic discussions were:
- Community Banks have developed deep trust and relationships in the communities they serve, and this trust is at the heart of any good banking relationship. The Community Bank Advisory Council provided considerable detail about why small community banks retain servicing rights and how their direct and continuous contact with their customer base results in successful loss mitigation outcomes for their troubled borrowers.
- Credit unions’ not-for-profit mission and dedication to financial empowerment and financial education sets credit unions apart as trusted and reliable leaders and partners in local communities. In a lively discussion about the role of credit unions in leveling the playing field for consumers, Credit Union Advisory Council members debated whether their role as institutions is to provide cash-crunched consumers with viable and more cost-efficient alternatives to high-interest payday loans or to provide education and services designed to help their members become less reliant on short-term small-dollar loans.
- In discussions about the challenges and opportunities in the post-financial crisis environment, advisory council members expressed concern about the unintended consequences of regulatory and other measures which may be aimed to help consumers but to which it can be challenging for smaller financial institutions to adapt. They emphasized that smaller financial institutions like community banks and credit unions can be greatly challenged by the presence of a new regulator and that the Bureau should work to make sure that the cost of complying with new regulations is not overly burdensome on small institutions.
- While learning about our Consumer Education and Engagement work, Community Bank and Credit Union Advisory Council members expressed great interest in and support for financial education. Sound financial education can equip consumers so that they can make responsible choices. Both the Credit Union and Community Bank Advisory Councils agreed that financial education should be integrated into the k-12 curriculum so that young adults enter the marketplace empowered to make smart financial choices. Many council members’ institutions are spearheading local financial education efforts – partnering with local schools, community colleges, community organizations and churches. All expressed great interest in learning about and partnering with the Miss April to offer more education in their local communities.