Nov. 1, 2012 – Wednesday was a busy day for the Consumer Financial Protection Bureau, with the agency unveiling the first edition of a new report that outlines citations examiners found during the supervisory process, an appeals policy for supervised institutions, and an updated version of its examiner field guide.
The first edition of the CFPB’s Supervisory Highlights report reflects supervisory activities conducted between July 21, 2011 and Sept. 30, 2012. Among the key violations noted in the report:
- failure on the part of a financial institution to have the proper procedures in place to ensure that credit line increase requests for a credit card are sent to the co-applicant for approval;
- insufficient training to comply with fair credit reporting requirements, which sometimes led to inaccurate reporting to the credit bureaus; and
- failure to provide mortgage borrowers with “clear and timely disclosures about the nature and costs of the real estate settlement process,” –– on this point, the agency cited inaccurate Good Faith Estimates or HUD-1 forms as examples.
The report also chronicles the CFPB’s efforts to assess institutions’ efforts to develop and maintain effective compliance management systems and its public enforcement actions. The latter, combined with actions from other agencies, have led to roughly $435 million in refunds to 5.7 million consumers, the CFPB estimates.
The CFPB is also inviting public comment on a newly unveiled policy that would allow supervised entities to appeal certain supervisory findings in examination reports and supervisory letters. The CFPB is permitting regulated financial service providers, including depository institutions, to request a review of a less than satisfactory compliance rating (a 3, 4, or 5) or any underlying adverse finding cited in the relevant examination report or supervisory letter. All appeals will be reviewed by a committee that includes CFPB management in Washington as well as representatives of regional offices that were not involved in the matter under review.
According to the CFPB, the policy promotes the agency’s goals of “having constructive supervisory relationships with supervised entities and having a fair and factually based supervision program.” The agency is inviting the public to send any comments about the policy to: CFPB_Supervision@CFPB.gov.
The updated CFPB Supervision and Examination Manual, also released Wednesday, reflects a number of technical changes, including the renumbering of the CFPB’s consumer financial protection regulations. Among other changes, it also incorporates updated interagency examination procedures for the Truth in Lending Act and for the Fair Credit Reporting Act, both of which were revised to reflect statutory and regulatory changes. The revised manual is available online.