The Consumer Financial Protection Bureau will now subject its important research to peer review examination, the agency announced last week.
While the announcement may seem innocuous, the agency’s review of key research—ranging from its regulation of arbitration agreements to payday lending—has been questioned in the past.
Agency officials said that they will rely on its Academic Research Council, a panel of outside authorities on consumer finance, to conduct the review.
“Given their extensive substantive expertise outside of the Bureau on research related to our mission, the ARC can provide objective feedback,” the agency said, in announcing the change. “Furthermore, given the members’ commitment to supporting the Bureau’s research, they can also be counted on to conduct a thorough review.”
Materials produced as part of the peer review process will be posted on the agency’s website.
While the agency is still determining the scope of the research it will subject to the peer review process, CFPB officials said that it is using the process to examine a study on time-barred debt.
The agency’s research has provoked controversy in the past. In rescinding large parts of the CFPB’s strict payday loan rule, then-Acting Director Mick Mulvaney and current Director Kathleen Kraninger questioned the research that was used to justify the strict regulation.
In another case, the Cause of Action Institute, a free market think tank, had complained that the agency had decided to ban arbitration agreements even before conducting research. “The CFPB already had the goal in mind to regulate and ban these arbitration clauses, driven largely by internal bias and promoted by third-party interests,” the group said at the time. “Instead of conducting an objective study backed by peer review, the agency sought a pre-determined result, abusing junk science and methodology to get there.”