The Consumer Financial Protection Bureau (CFPB) should reassess the way it integrates enforcement attorneys into its examinations, says the Office of the Inspector General (OIG) in a recent investigation.
OIG found that many of the CFPB’s early hires within its supervision and enforcement functions previously worked at various federal banking agencies or other regulatory agencies before coming to the Bureau, whereupon the agency decided to integrate at least one enforcement attorney into each examination.
The benefits of this approach, according to the CFPB, would be realized in timesaving efforts and compressed fieldwork associated with the examination and any enforcement action into one step.
But they varying backgrounds of these attorneys have caused concern for the OIG.
“These early hires brought a variety of viewpoints on how the supervision and enforcement functions should work together in executing the agency’s supervision and enforcement mandates,” noted the OIG.
The OIG findings indicate that a CFPB February 2012 policy describing the general principles of this integrated approach did not sufficiently detail how the approach should be implemented, nor was it uniformly distributed to CFPB supervision and enforcement staff.
“As a result, CFPB supervision and enforcement staff’s awareness, understanding, and execution of the policy, as well as their messaging to supervised institutions concerning the role of enforcement attorneys in examinations, varied considerably,” stated OIG.
OIG also learned from its investigation that the CFPB’s enforcement attorneys did not receive formal training on the agency’s examination process and that the CFPB lacked a policy on enforcement attorneys’ access to institutions’ systems during examinations.
“We believe that opportunities exist to enhance awareness of management’s expectations regarding the integrated approach and the procedural safeguards associated with the practice,” OIG stated.
Toward the end of its report, OIG indicates that it intends to conduct future follow-up activities to determine whether the CFPB’s actions are responsive to recommendations made following the investigation.
Written by Jason Oliva