Lenders’ Confidential Info Still Open to CFPB Scrutiny

This week, the Consumer Financial Protection Bureau (CFPB) notified mortgage lenders and other financial institutions on how to treat confidential information related to the agency’s supervisory examination practices.

First and foremost, the bulletin issued on Tuesday provides guidance on what types of information constitute “confidential supervisory information.”

Under the CFPB’s regulations, CSI may include any work papers or other documentation that CFPB examiners have prepared in the course of an examination. Additionally, any CFPB supervisory actions, such as memoranda of understanding between the CFPB and an institution, and related submissions and correspondence, are also considered as confidential information.

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Even if firms have signed private confidentiality and non-disclosure agreements that restrict the sharing of certain information with a regulator, this does not impact CFPB’s authority to obtain information from service providers in its exercise of supervisory authority.

“The bulletin explains that provisions in non-disclosure agreements do not alter or limit the Bureau’s existing supervisory authority or the supervised financial institution’s obligations relating to confidential supervisory authority,” CFPB stated.

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has supervisory authority over banks and credit unions with assets over $10 billion, and their affiliates. 

The Bureau is also the first federal agency with such authority over certain non-bank financial companies such as mortgage lenders and servicers, payday lenders, private student lenders, as well as large debt collectors, consumer reporting agencies, student loan servicers and international remittance providers. 

“The CFPB’s supervision program holds companies accountable for how they treat consumers,” said CFPB Director Richard Cordray in a written statement accompanying the compliance bulletin. “The Bureau’s oversight of banks and nonblanks alike helps to level the playing field for all companies, and to ensure a fair and transparent marketplace for consumers.”

Written by Jason Oliva

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