Building upon a controversial scaling back of its once zealous enforcement, and a zeroed-out budget request, the new leadership at the Consumer Financial Protection Bureau is continuing its public consultation process as it releases a new, five-year strategic plan for operations through 2020.
On Feb. 14, the CFPB issued a Request for Information regarding the Bureau’s supervision processes. “The Bureau is seeking comments and information from interested parties to assist in assessing the overall efficiency and effectiveness of its supervision program and whether any changes to the program would be appropriate,” it said.
The CFPB has supervisory authority over insured depository institutions and credit unions with total assets over $10 billion and their affiliates, as well as non-depository financial institutions, regardless of size, in certain specific markets including mortgage companies (originators, brokers, servicers, and offerors of loan modifications or foreclosure relief services), payday lenders, and private education lenders.
The Bureau also has supervisory authority over non-depository larger participants of other markets, as defined by rulemaking. To date, this includes larger participants in the consumer reporting, debt collection, student loan servicing, international money transfer, and automobile finance markets.
Additionally, the CFPB has authority over service providers of the above referenced supervised entities, and service providers to a substantial number of depository institutions and credit unions with total assets of $10 billion or less.
The Bureau is seeking feedback on all aspects of its Supervision Program, including but not limited to:
The timing, frequency, and scope of supervisory exams.
The timing, method or process used by the Bureau to collect information and documents from a supervised entity prior to the commencement of an examination.
The type and volume of information and documents requested in IRs.
The effectiveness and accessibility of the CFPB Supervision and Examination Manual.
The efficiency and effectiveness of onsite examination work.
The effectiveness of Supervision’s communications when potential violations are identified, including the usefulness and content of the potential action and request for response (PARR) letter.
The clarity, organization, and quality of communications that report the results of supervisory activities, including oral communications from examiners and Supervisory Letters and Examination Reports.
The clarity of matters requiring attention (MRA) and the reasonability of timing requirements to satisfy MRAs.
The process for appealing supervisory findings.
The use of third parties contracted by supervised entities to conduct assessments specified in MRAs, or to assess the sufficiency of completion of an MRA.
The usefulness of Supervisory Highlights to share findings and promote transparency.
The manner and extent to which the Bureau can and should coordinate its supervisory activity with Federal and state supervisory agencies, including through use of simultaneous exams, where feasible and consistent with statutory directives.
This is the fourth in a series of RFIs announced as part of Acting Director Mick Mulvaney’s call for evidence to ensure the Bureau “is fulfilling its proper and appropriate functions to best protect consumers.”
The next RFI in the series, addressing the Bureau’s external engagement processes, and will be issued next week.
The RFI on supervision processes is available online. The Bureau will begin accepting comments once the RFI is printed in the Federal Register, which is expected to occur on February 20. The RFI will be open for comment for 90 days.
The Bureau anticipates issuing RFIs on the following topics in the coming weeks: external Engagement; complaint reporting; rulemaking processes; Bureau rules not under §1022(d) assessment; inherited rules; guidance and implementation support; consumer education; and consumer inquiries.
More information about the call for evidence is also available online.
On Feb. 12, the CFPB released a five-year Strategic Plan that establishes its mission, strategic goals, and strategic objectives.
“If there is one way to summarize the strategic changes occurring at the Bureau, it is this: we have committed to fulfill the Bureau’s statutory responsibilities, but go no further,” Acting Director Mick Mulvaney said in a statement. “By hewing to the statute, this Strategic Plan provides the Bureau a ready roadmap, a touchstone with a fixed meaning that should serve as a bulwark against the misuse of our unparalleled powers.”
Among changes from the prior Strategic Plan, “the Bureau will now focus on equally protecting the legal rights of all, including those regulated by the Bureau, and will engage in rulemaking where appropriate to address unwarranted regulatory burdens and to implement federal consumer financial law and will operate more efficiently, effectively, and transparently,” Mulvaney said.
The plan is divided into three categories of “goals” that will be prioritized on rulemaking and enforcement. They include: ensuring that all consumers have access to markets for consumer financial products and services; implementing and enforcing the law consistently to ensure that markets for consumer financial products and services are fair, transparent, and competitive; and fostering operational excellence through efficient and effective processes, governance, and security of resources and information.