Federal Reserve's Consumer Advisory Council
A Q&A with Governor Gramlich
The Consumer Advisory Council (CAC) is the public's link to the Federal Reserve Board of Governors. At the Board's suggestion, Congress created the CAC to help the Board get advice from consumers, communities and the financial services industry about consumer protection laws and related topics. Federal Reserve Governor Edward M. Gramlich, who has Board oversight of the CAC, offers answers to the following questions.
What is the purpose of the Consumer Advisory Council?
The Consumer Advisory Council was created by Congress in 1976 to provide consumers and the financial services industry with an important means of communicating with the Board of Governors. The council consists of individuals with diverse backgrounds representing the financial services industry, consumer and community organizations, state and local government, and academia. The 30 council members serve staggered three-year terms, with one-third of the membership changing each year. CAC meetings are held three times annually.
The council's purpose is to:
- Advise and consult with the Board on matters regarding consumer financial services of interest to the Board or that fall within the Board's statutory authority. Some examples are predatory lending, financial literacy, identity theft, privacy, electronic disclosures and mortgage reform.
- Assist the Board in its rule-writing responsibilities. Examples are the Community Reinvestment Act, Equal Credit Opportunity Act, Home Mortgage Disclosure Act, Electronic Fund Transfer Act and Truth in Lending Act.
In selecting new CAC members, what factors are considered?
We look for individuals with:
- Significant knowledge of various aspects of consumer financial services and products, consumer regulations, affordable housing and community development.
- In-depth experience working in the financial services industry, consumer and community organizations, academia, or state or local government agencies.
- Diversity of knowledge and experience to provide the Board with a broad mix of viewpoints and perspectives on issues the Board may be considering.
- Backgrounds that complement those of returning council members in terms of experience, affiliation and geographic representation.
How are the topics determined for each meeting agenda?
Members generally focus on topics relative to the Board's responsibilities or areas of interest. Often, members provide comments on proposed regulations or regulatory changes developed by the Board regarding consumer financial services issues. Topics can also be emerging issues that may affect the Board or that may ultimately involve the Board in rulemaking. Topics can be identified either by the Board or by council members.
Because CAC meetings are open to the public and others like yourself attend them, how do you personally use the council's insights and information?
This is the only advisory council to the Board that consists of more than industry representatives. The council's diverse makeup results in rich and complete discussions of the issues and ultimately adds to the value of the information provided.
The discussions help me and other Governors expand our knowledge through one-on-one interaction with experts on consumer and financial services issues, better understand different sides of an issue, and understand the intended and unintended consequences of important decisions. These interactions result in improved decisions on regulatory matters and public policy issues.
For more information about the Consumer Advisory Council, visit the Federal Reserve Board's web site .
About Governor Gramlich
a former economics professor at the University of Michigan and a prolific
author on subjects as diverse as macroeconomics, benefit-cost analysis,
social security and the economics of professional sports. He has been
on the Federal Reserve Board of Governors since 1997.