The Consumer Financial Protection Bureau and the Conference of State Bank Supervisors (CSBS) announced a framework on Tuesday creating a process for coordinating supervision and enforcement - specifically for when the CFPB and state regulators share concurrent supervisory jurisdiction.

“Our strong partnership with state regulators is critical to protecting consumers,” said CFPB Director Richard Cordray. “By working together, we are streamlining our processes, making the most of our joint resources, and ensuring evenhanded oversight of federal consumer financial laws.”

The framework is based on a memorandum of understanding signed by CFPB and CSBS in 2011 and a corresponding 2012 Statement of Intent issued by the CFPB.

The memorandum provides that state regulators and the CFPB will consult on standards, procedures, and practices used to conduct examinations of providers of consumer financial products and services to ensure that they are complying with federal consumer financial law. The framework applies to all non-depository institutions and those depository institutions with more than $10 billion in assets.

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires the CFPB to coordinate supervisory activities with state bank regulators. The framework announced Tuesday facilitates the implementation of this statutory requirement by providing a guide for flexible and dynamic regulatory coordination that both protects consumers and reduces regulatory burden on industry. Among other things, the framework provides processes for:

  • coordinating exam schedules;
  • developing comprehensive supervisory plans for particular institutions;
  • coordinating information requests;
  • streamlining information sharing; and
  • providing advance notice of corrective actions.

A copy of the framework can be found at: http://files.consumerfinance.gov/f/201305_cfpb_state-supervisory-coordination-framework.pdf.

 

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