On January 4, 2011, the Treasury issued a Press Release, entitled:
Federal Consumer Agency to Partner with State Regulators on Supervision of Providers of Consumer Financial Products and Services, Including Mortgage Lenders, Private Student Lenders and Payday Lenders
According to the Press Release, the Consumer Financial Protection Bureau (CFPB) and the Conference of State Bank Supervisors (CSBS) signed a Memorandum of Understanding (MOU) that sets forth an initiative for state regulators and the CFPB to endeavor to "promote consistent examination procedures and effective enforcement of state and federal consumer laws and to minimize regulatory burden and efficiently deploy supervisory resources."
I have covered the CFPB since its inception as a potential agency to its actual creation through the Dodd-Frank Act. If you want to read some background, please feel free to visit our Library and download these articles.
- Part III: Consumer Financial Protection - Bureau and Bureaucracy (10/10)
- The CFPA Controversy: Asking the Tough Questions (10/09)
- The Birth of an Agency (Consumer Financial Protection Agency) (09/09)
Or visit our general Archive for the compliance updates.
The MOU also provides that "state regulators and the CFPB will consult each other regarding the standards, procedures, and practices used by state regulators and the CFPB to conduct compliance examinations of providers of consumer financial products and services," including non depository mortgage lenders, mortgage servicers, private student lenders, and payday lenders.
In the Press Release, Elizabeth Warren, the Special Advisor to the Secretary of the Treasury on the CFPB, stated: "This agreement allows us to bring thousands of financial service providers out of the shadows and to begin the process of ensuring that all lenders comply with the same basic rules."
And Thomas Gronstal, Chairman of the CSBS, stated: "The formalized coordination between the states and the federal government established by the MOU will do much to create a comprehensive and seamless system of financial supervision and is a step toward a more cooperative system of supervision, which will benefit consumers and financial services providers alike."
Essentially, the MOU outlines three areas of cooperation:
1) Promoting consistent examination procedures and enforcement of state and federal consumer laws;
2) Minimizing regulatory burden and efficiently deploying supervisory resources; and,
3) Consulting each other regarding the standards, procedures, and practices used to conduct compliance examinations of providers of consumer financial products and services, including non-depository mortgage lenders, mortgage servicers, private student lenders, and payday lenders.