CFPB Outlines Bank Supervision Approach

Source: www.treasury.gov

7/12/2011

CFPB Will Begin Its Examination Program for Large Banks on July 21

WASHINGTON – The Consumer Financial Protection Bureau (CFPB) today outlined the agency’s approach to supervising large depository institutions to ensure compliance with federal consumer financial protection laws – a supervisory process that will begin on July 21, 2011.

“The new consumer agency is here to make sure that markets work for American families, and our bank supervision program is a big part of that,” said Elizabeth Warren, Special Advisor to the Secretary of the Treasury on the CFPB. “Starting on July 21, we will be a cop on the beat – examining banks and protecting consumers.”

Scope of Bank Supervision Program

Leading into the recent financial crisis, consumer financial protection authorities were spread among seven different federal agencies. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) streamlined consumer protection oversight authority into the CFPB – promoting greater efficiency and accountability for American consumers.

The consumer agency will conduct examinations to help ensure that consumer financial practices at large banks conform with consumer financial protection legal requirements. The CFPB’s bank supervision program will oversee the 111 depository institutions that have total assets over $10 billion. Subsidiaries and all other affiliates of these institutions also fall under the CFPB’s authority. These institutions collectively hold more than 80 percent of the banking industry’s assets.

Staffing and Training

A diverse and talented team of examiners throughout the country, managed out of satellite offices in Chicago, New York, San Francisco, and Washington, D.C., will form the front line in the CFPB’s supervisory efforts. Each of these satellite offices will be the nexus for CFPB supervision in their respective areas of the country. Having examiners and field managers focused on these regions will help ensure that the CFPB understands the business practices and dynamics in different markets throughout the country. The examiners working in those regions will spend much of their time on-site at depository institutions and at other consumer financial services companies.

A large part of the CFPB’s supervision staff will be made up of experienced examiners: By the end of July, the CFPB supervision team will include more than 100 staff members transferring directly from the Federal Deposit Insurance Corporation, the Federal Reserve System, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. The CFPB expects eventually to have several hundred examiners on board, coming from a variety of backgrounds, including state regulatory agencies and industry. Experienced examiners will sharpen their skills in workshops before being deployed, and examiners new to consumer financial protection will receive extensive technical and professional skills training. (continued)