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The Consumer Financial Protectin Bureau will publish a final rule Wednesday to supervise firms with more than $10 million in annual receipts.
October 24 -
A final rule places credit reporting agencies under the bureau's nonbank supervision program as part of its "larger participant" powers.
July 16 -
Peggy Twohig, the head of nonbank supervision for the CFPB, says the nonbank supervision team is working to assess risk in the market and identify which companies will be subject to exams.
January 6
WASHINGTON – The Consumer Financial Protection Bureau has been supervising institutions for just over a year, and already has found inaccurate “good-faith estimates” in mortgage disclosures, credit limits raised without full consent of some consumers and bank employees not trained to deal with credit reporting standards.
That was just a sampling of recent findings in the first issue of the CFPB’s “Supervisory Highlights”, a regular update providing banks and the public with insight on what the bureau is discovering in recent exams.
“Through our supervision process, we are bringing heightened oversight to the consumer financial markets,” CFPB Director Richard Corday said in a press release. “This report underscores our work to address practices that are risky to consumers, as well as our continued commitment to making sure that institutions are following the law.”
The report – which resembles articles some of the other bank regulators put out on supervisory trends – does not amount to actual rulemaking, and does not identify actual perpetrators. But the bureau said it will help keep the public and institutions under the CFPB’s watch better informed about the agency’s thinking. (The report covered supervision work from July 21, 2011, through Sept. 30, 2012.)
“This document will not refer to any specific institution but signal to all institutions the kinds of activities that should be carefully scrutinized for compliance with the law,” the report said in its executive summary. “The CFPB believes that Supervisory Highlights will help providers of financial products and services better understand the CFPB’s supervisory expectations so that they can take action to comply with Federal consumer financial laws and serve their customers in a fair and transparent way.”
The CFPB also released a bulletin on procedures for financial institutions to appeal recent supervisory findings by the bureau. The bulletin was accompanied by updates to the CFPB’s overall supervision and examination manual.
“Financial service providers under the CFPB’s jurisdiction may request a review of a less than satisfactory compliance rating or any underlying adverse finding set forth in the relevant examination report, or adverse findings conveyed in a supervisory letter,” the CFPB said. “Appeals will be handled by a committee that includes management at CFPB headquarters in Washington, D.C. and representatives of regional offices that were not involved in the matter under review.”
Among findings in the “Supervisory Highlights” report, the bureau noted instances where credit limits on cards used by someone under 21 were raised, even though co-applicants older than 21 had not given their consent.
“The bureau found that these violations typically occurred when an institution did not have proper procedures in place to ensure that credit line increase requests are sent to the co-applicant for approval,” the CFPB said.
Other highlights included that not all “relevant employees” at institutions had received proper training in complying with fair credit reporting requirements. In addition to inaccurate good-faith estimates, the CFPB said mortgage violations also included “failure to provide accurate disclosures of interest rates, payment options and payment schedules.”
