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CFPB Acts as If It’s Doing Banks a Favor

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This month the Consumer Financial Protection Bureau held an invitation-only teleconference and issued a press release announcing its "Early Warning Notice," which would allow banks the opportunity to respond to findings by the CFPB before commencing enforcement actions.  

That the CFPB thought it important enough to issue a press release announcing that it would adhere to the most basic due process tenet of bank regulation and law enforcement -- to allow the subject of an examination and/or investigation to explain its practices before filing an enforcement action -- raises serious fundamental concerns as to this new agency's intended approach to exercising its enormous regulatory and enforcement powers.  

One would certainly hope that an agency relying on hundreds of newly hired examiners (many with no prior regulatory experience) to assess compliance with a host of new rules and regulations (including the new statute on unfair, deceptive, and abusive acts and practices) might think it a first principle to engage in dialogue with a bank before declaring it subject to enforcement action. 

Andrew L. Sandler is the chairman and executive partner at BuckleySandler LLP in Washington. He regularly represents financial services companies in state attorney general investigations, litigation and enforcement actions around the country and has been the lead defense counsel in more than 80 class action cases in federal and state courts.

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Comments (1)
"One would certainly hope that an agency relying on hundreds of newly hired examiners (many with no prior regulatory experience) to assess compliance with a host of new rules and regulations (including the new statute on unfair, deceptive, and abusive acts and practices)..."

Do you mean as opposed to the criminals -- I meant to say the highly educated, experienced financial professionals-- who commited fraudulent acts that resulted in F****** UP a global economy, bringing it to its knees and expects it victims to allow them to carry on as though "they had absolutely nothing to do with this situation? Or as opposed to the highly trained professionals banks hired to pretend to faciliate loan modifications, or the highly trained, experienced professionals at the foreclosure law-mill firm skilled in robo-signing? I'm confident the CFPB has vetted its newly hired examiners extremely well.
Posted by Duidlijke | Monday, November 21 2011 at 4:17PM ET
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