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CFPB blog post outlines Director Chopra's stance on repeat offenders
The CFPB this week issued a new blog post, "Reining in Repeat Offenders," featuring Director Rohit Chopra's remarks before the University of Pennsylvania Law School where he explains that the bureau will be looking to enforce "limits on the activities or functions" of a firm following violations of laws, regulations, and orders.
A repeat offender in this instance includes not only those that violate a court or agency order, but also those that have law violations across different business lines stemming from a common cause. For example, problematic sales practice incentives or a failure to properly integrate IT systems after a merger.
The limits on activities or functions that the CFPB may enforce include:
- caps on size or growth;
- bans on certain types of business practices;
- divestitures of certain product lines;
- limits on leverage or requirements to raise equity capital;
- revocation of government-granted privileges; or
- losing access to federal deposit insurance, specifically insurance provided by the Federal Deposit Insurance Corporation (FDIC).
For non-bank financial institutions, the bureau noted it would work with state licensing officials. However, any organization subject to CFPB supervision should be aware of this endeavor, as the bureau is planning to establish dedicated supervision and enforcement divisions to detect repeat offenders. This will mean greater scrutiny to ensure CFPB orders are being followed and ensuring greater coordination among other agencies.
For more information, NAFCU Director of Regulatory Compliance Kaley Schafer tackles this topic in today's post on the NAFCU Compliance Blog. The association will continue to keep credit unions updated on the latest from the CFPB.