IG to Study How Well CFPB Assumes Supervisory Powers Over Institutions
Assessment will focus on credit unions and banks with over $10 billion in assets.
With more financial institutions reaching the $10 billion threshold to transfer to CFPB supervision, the agency’s Inspector General plans to assess the transition process, according to the IG’s latest Work Plan.
The CFPB supervises credit unions and banks with assets of more than $10 billion and the plan notes that, during the past few years, an increasing number of financial institutions have reached that threshold. As a result, the IG intends to assess the effectiveness of the transition efforts.
The Work Plan provides details of studies that the IG intends to conduct and is not an indication of allegations of wrongdoing at the agency. The CFPB shares an IG with the Federal Reserve.
Increased Scrutiny Facing the CFPB
The bureau is certain to be the subject of heightened attention in the House, where Republicans have gained control of the majority. Even before he became chairman of the House Financial Services Committee, Rep. Patrick McHenry, R-N.C., indicated that CFPB Director Rohit Chopra will be spending a great deal of time on Capitol Hill. Congressional Republicans have been vehement critics of Chopra’s aggressive regulatory regime.
The congressional probes would be separate from those conducted by the IG.
What Else Is in the Plan?
In its Work Plan, the IG outlined several other investigations, including studies of:
–The agency’s process for conducting enforcement investigations. The IG said that CFPB officials have identified the filing of timely enforcement actions because it provides consumers with greater protection and is a deterrent.
–How well the CFPB ensures that examination staff members have no conflicts of interest.
–The CFPB’s Civil Penalty Fund. Dodd-Frank authorized the agency to collect civil penalties from any person or business. The money in the fund is used to pay victims of activities for which the penalties have been imposed. The CFPB may use excess funds for consumer education and financial literacy programs.
–How well the CFPB responds to consumer complaints. “With an increase in consumer complaints as a result of the COVID-19 pandemic, Consumer Response faces an operational risk with respect to the timeliness in which it can respond to consumer complaints,” the IG said.