CFPB Offers Details on Large Bank Supervision Program

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter, July 13, 2011.

The Consumer Financial Protection Bureau will begin ensuring that large depository institutions are complying with federal consumer financial protection laws when it launches operations on July 21.

Banks with total assets over $10 billion, which account for over 80 percent of industry assets, will be overseen by the CFPB supervision program. The CFPB said it will provide further information via letter to the 111 banks falling under its jurisdiction in early August.

Elizabeth Warren, Special Treasury Advisor on the CFPB, noted  that the CFPB “is here to make sure that markets work for American families, and our bank supervision program is a big part of that.”

The CFPB noted that by the end of July its supervision team will include over 100 staff members who have transferred from the Federal Deposit Insurance Corp., Federal Reserve Board, Office of the Comptroller of the Currency and Office of Thrift Supervision. Examiners will work out of satellite offices based in Chicago, New York, San Francisco and Washington D.C. The agency expects to eventually have several hundred examiners in place.

Firms that are not fully complying with federal consumer protection laws will face corrective actions from the CFPB, such as strengthening their programs and processes to ensure that violations do not recur. The CFPB added that, when necessary, examiners will coordinate with CFPB enforcement staff to implement “appropriate enforcement actions to address harm to consumers.”

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