WASHINGTON The Consumer Financial Protection Bureau is generally coordinating with prudential regulators on supervisory issues to avoid duplicating responsibilities, but communication between the agencies can still be improved, the CFPB's watchdog said Thursday.
The report by the CFPB's inspector general which also serves as the IG for the Federal Reserve Board recommended the bureau update how it tracks written exchanges with the other regulators about consumer law violations by smaller institutions.
Under the Dodd-Frank Act, enforcing consumer protection laws at banks and credit unions below $10 billion in assets falls to the prudential regulators. But the CFPB is required to notify one of the agencies either the Fed, Federal Deposit Insurance Corp., National Credit Union Administration or Office of the Comptroller of the Currency if the bureau believes an institution has violated the law. The CFPB's IG conducted a joint review of coordination activities with the watchdogs of the other agencies.
"The OIGs concluded that the CFPB and the prudential regulators were generally coordinating their regulatory oversight activities for federal consumer financial laws," the report says. "Nonetheless, the OIGs identified opportunities for enhanced coordination, including an opportunity for the CFPB to develop a standard process for notifying the prudential regulators of federal consumer financial law violations by institutions with $10 billion or less in total assets."
The report recommends that the CFPB create a policy detailing when written notifications are required and for tracking that correspondence. The CFPB responded to that recommendation by finalizing its "civil referrals incoming and outgoing policy," which lays out those procedures, the report said.
The CFPB's watchdog subsequently asked the agency to further update the policy to include the tracking of agency responses in addition to any outgoing mail. Regulators are required under Dodd-Frank to respond to notifications about an institution breaking a consumer finance law within 60 days.
The report includes a June 24 response from Steven Antonakes the CFPB's deputy director and associate director of supervision, enforcement and fair lending agreeing to the additional changes to the agency's policy.
The agency "is committed to promoting robust cooperation and information exchange between CFPB and the federal prudential regulators at all levels," Antonakes said.