CFPB Says “Responsible Conduct” is Enforcement Consideration

Financial institutions may have a line of defense against enforcement actions from the Consumer Financial Protection Bureau if they are operating under “responsible conduct,” according to a bulletin posted by the CFPB this week. 

If operating under this type of conduct, the bureau may “favorably consider [this] in exercising its enforcement discretion.”

In exercising its discretion, the Bureau considers this among several factors including the nature, extent, and severity of the violations identified; the actual or potential harm from those violations; whether there is a history of past violations; and a party’s effectiveness in addressing violations.

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Self-policing is also possible, and will be considered by the agency. 

“Specifically, a party may proactively self-police for potential violations, promptly self-report to the Bureau when it identifies potential violations, quickly and completely remediate the harm resulting from violations, and affirmatively cooperate with any Bureau investigation above and beyond what is required,” the bureau writes.

These steps will be favorably considered in determination of an enforcement action.  

“If a party meaningfully engages in these activities, which this bulletin refers to collectively as “responsible conduct,” it may favorably affect the ultimate resolution of a Bureau enforcement investigation,” the CFPB writes. 

View the bulletin in detail

Written by Elizabeth Ecker

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