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The Consumer Financial Protection Bureau signed a memorandum of understanding on Tuesday with state banking regulators to coordinate supervision and implementation of consumer protection rules.
January 4 -
If you want to know why the American Bankers Association blames the Independent Community Bankers of America for undercutting the industry's lobbying on regulatory reform legislation, you have to start in Nebraska.
December 20 -
Richard Cordray, David Silberman and Leonard Chanin have been hired for key positions in the Consumer Financial Protection Bureau.
December 15 -
The new slate of House Republicans picked to preside over financial services said they intend to downsize or dismantle the mandates supported by their predecessors.
December 9 -
WASHINGTON — Although the Consumer Financial Protection Bureau began breaking in new headquarters last week, the agency's architect, Elizabeth Warren, told reporters she does not intend to stay chained to her downtown Washington office.
October 22
WASHINGTON — The Consumer Financial Protection Bureau struck a deal Tuesday with state bank supervisors to coordinate supervision and implementation of consumer protection rules.
Under a memorandum of understanding, the states will share confidential supervisory and exam information with the bureau.
"Starting today we will work together to promote consistent examination procedures of institutions to make sure effective enforcement of state and federal consumer laws, to minimize regulatory burden and to efficiently deploy regulatory resources," said Elizabeth Warren, assistant to the president and special adviser to the secretary of the Treasury Department.
John Ryan, executive vice president of Conference of State Bank Supervisors, said the agreement will initially focus on nondepository financial institutions that will receive federal supervision for the first time. "All of our discussions have been on the nondepository side," Ryan said.
Cam Fine, president of the Independent Community Bankers of America, said that is a "step in the right direction."
"It's a practical matter of the CFPB working with the various state regulators to ensure there is uniform enforcement of nonbank lenders," Fine said. "I'm encouraged by it because at minimum it shows that Elizabeth Warren is focusing some attention on nonbank lenders."
Warren said the bureau can learn from the states on areas such as mortgage servicing. "We've all been confronted recently with ample evidence of haphazard and possibly illegal practices of mortgage servicing companies that have called into question home mortgage foreclosures," she said. "An interagency task force of the Obama administration is working to get to the bottom of these issues and many of those here today are a part of the multistate committee which is examining actions of servicers across the country. I commend them for the work they have done thus far. We can learn from the [Conference of State Bank Supervisors] efforts and what they have seen on the ground. We are hopeful these lessons will inform the bureau and the agency going forward."
The consumer bureau and states will jointly supervise and enforce consumer protection laws against banks with more than $10 billion of assets and all nonbanks. The states will continue to have sole enforcement powers over all smaller state-chartered banks, but agreed to share supervisory information with the bureau.
The memorandum of understanding aims to promote consistent examination procedures and enforcement of consumer protection laws. It says that state regulators and the new agency will consult one another on standards, procedures and practices used by state regulators and the new bureau.
Specifically, the states agreed to share with the bureau information about the development and implementation of examination processes, including exam manuals, standardized information requests, on-site and off-site exam procedures. They will also share any confidential supervisory information and any enforcement demand or request for nonpublic information. The CFPB and CSBS agreed to meet at least annually to discuss training programs for examiners.
Ryan called this a starting point. "It really sets a framework and expectations for the lot left to do," he said. "This sets a framework for all states to be able to sign onto this in areas where they supervise for nondepository supervision, but it also sets expectations that we are going to be coordinating on exams, on examination practices, and enforcement. It's a very important step."
Thomas Gronstal, chairman of the bank supervisor group and head of the Iowa Division of Banks, said the alliance "has very real benefits for providers of financial services."
"The industry will benefit from the coordinated examinations, consistent procedures and guidelines and improved efficiency," Gronstal continued. "State regulators are aware of the negative impact [that] excessive uncoordinated regulation can have on the industry, the economy and consumers themselves. … It is our belief that strong consumer protection and a flourishing industry need not be in conflict but are in fact complementary."
