State Regulators Join Forces With CFPB Lender Oversight

Federal and state regulators are making plans to work together more closely than ever in their oversight of banks and lending entities.

In a plan outlined this week, the Consumer Financial Protection Bureau and the Conference of State Bank Supervisors said they will strengthen their relationship to better serve borrowers and customers of lenders across the U.S.

Newly appointed CSBS Chairman Charles Vice spoke of the partnership this week during the organization’s State-Federal Supervisory Forum, specifying the importance of combining supervisory efforts.


“We need each other, period,” Vice said. “Through this relationship, we provide checks and balances, we leverage our strengths, and we minimize our weaknesses.” 

The two agencies initially signed an information sharing memorandum of understanding in 2011 that also included additional financial regulatory agencies on the state and federal levels. The agreement now includes 59 state agencies. It will allow the CFPB and CSBS to work together and fill in any gaps in oversight, CSBS said, with the state agencies supporting the federal framework. 

“CFPB’s jurisdiction spans an array of industries that fall outside of the jurisdiction of CSBS members,” said John Ryan, President and CEO of CSBS. “However, there is a spirit of cooperation among these state regulatory agencies to ensure coordination with the CFPB. We look forward to facilitating that cooperation among state regulators.”

The Consumer Financial Protection Bureau has faltered recently in some of its oversight powers due to a lawsuit challenging the recess appointments of government agency directors. 

Its ongoing investigations, however, have recently led to both civil enforcement actions as well as criminal charges brought against at least one financial entity, marking a first for the agency still newly created under Dodd-Frank. 

View the framework.

Written by Elizabeth Ecker

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  • It will be interesting to see how the joint effort between the CFPB and the CSBS works. Will we see more regulations being imposed?

    Or, will we see a joint effort in cracking down on the predator and those getting away with breaking existing laws. I hope it will be the latter. We do NOT need more regulations imposed in any state. We may need some done away with or improved but not more imposed by government.

    What we need more than anything else is the enforcement of laws that we have on the books in every state. If the CFPB can accomplish this goal, then I say “Hara” for the implementation of joint effort participation.

    John A. Smaldone

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