CFPB Continues Search for Evidence with Supervision RFI

On January 17, 2018 CFPB Acting Director Mick Mulvaney announced that he was issuing a "call for evidence" to ensure the Bureau is fulfilling its proper and appropriate functions to best protect consumers. Yesterday they released the latest in a series of Requests for Information regarding its practices -- this time regarding its Supervision program.

Here's what they want to hear about:

1. The timing, frequency, and scope of supervisory exams. 
2. The timing, method or process used by the Bureau to collect information and documents from a supervised entity prior to the commencement of an examination. Typically, the Bureau sends an examination Information Request (IR) to a supervised entity prior to the commencement of an examination. An IR is a list of information and documents that the supervised entity is asked to provide to the Bureau for off-site review or to make available when examiners are onsite at the entity. An IR is typically sent to an entity at least 60 days prior to the onsite start of an examination.
3. The type and volume of information and documents requested in IRs.
4. The effectiveness and accessibility of the CFPB Supervision and Examination Manual (Exam Manual). The Exam Manual provides internal direction to supervisory staff, including summaries of statutes and regulations and specific examination procedures for use by examiners in conducting exams. It is published on the Bureau’s website to promote transparency and assist the public in understanding how the Bureau oversees supervised entities. 
5. The efficiency and effectiveness of onsite examination work. Typically, while onsite, examination teams may review documents and data, hold meetings with management, conduct interviews with staff, make observations, and conduct transaction testing.
6. The effectiveness of Supervision’s communications when potential violations are identified, including the usefulness and content of the potential action and request for response (PARR) letter. A PARR letter provides an entity with notice of preliminary findings of conduct that may violate Federal consumer financial laws and advises the entity that the Bureau is considering taking supervisory action or a public enforcement action based on the potential violations identified in the letter. Supervision invites the entity to respond to the PARR letter within 14 days and to set forth in the response any reasons of fact, law or policy why the Bureau should not take action against the entity. The Bureau often permits extensions of the response time when requested.
7. The clarity, organization, and quality of communications that report the results of supervisory activities, including oral communications from examiners and Supervisory Letters and Examination Reports.
8. The clarity of matters requiring attention (MRA) and the reasonability of timing requirements to satisfy MRAs. An MRA is used to address violation(s) of Federal consumer financial law or compliance management weaknesses. MRAs often require a written response to the Bureau and will include a due date for completion.
9. The process for appealing supervisory findings.
10. The use of third parties contracted by supervised entities to conduct assessments specified in MRAs, or to assess the sufficiency of completion of an MRA.
11. The usefulness of Supervisory Highlights to share findings and promote transparency. The Bureau periodically publishes Supervisory Highlights to apprise the public about its examination program, including the concerns that it finds during the course of its work.
12. The manner and extent to which the Bureau can and should coordinate its supervisory activity with Federal and state supervisory agencies, including through use of simultaneous exams, where feasible and consistent with statutory directives.

The RFI on supervision processes is available here.

The Bureau will begin accepting comments once the RFI is printed in the Federal Register, which is expected to occur on February 20. The RFI will be open for comment for 90 days.

In recent weeks the CFPB has published RFIs for Civil Investigative Demands (the comment period closes on March 27), Administrative Adjudication (the comment period closes on April 6) and Enforcement (the comment period closes on April 13). 

Yesterday's announcement noted that the Bureau anticipates issuing RFIs on the following additional topics in the coming weeks:

• External Engagement
• Complaint Reporting
• Rulemaking Processes
• Bureau Rules Not Under §1022(d) Assessment
• Inherited Rules
• Guidance and Implementation Support
• Consumer Education
• Consumer Inquiries