The Consumer Financial Protection Bureau (CFPB) outlined their plans for the supervision and examinations of large depository institutions to begin on the bureau's official launch date, July 21, 2011.
The Dodd-Frank Act provided oversight authority of the large institutions to the new agency. The agency plans to begin exercising the authority by immediately beginning the examination process with over 100 staff members reviewing the activities of 111 institutions that have more than $10 billion in total assets. The teams of examiners will operate regionally through satellite offices that will provide the CFPB greater access to conduct on-site examinations and better understanding of the business practices in different markets.
Many of the examiners are transferring from other agencies including Federal Deposit Insurance Corporation, the Federal Reserve System, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision.
The process will entail an on-going review of bank activities with larger organizations being subject to year-round supervision programs. The goal of the review is to ensure that consumer risks are addressed and compliance efforts are strengthened. Additionally, the process will evaluate each organizations ability to detect, prevent and remedy violations that expose consumers to harm. Their review will assess how products are developed, marketed, sold and managed and include compliance with fair lending practices.
As part of the examinations, the CFPB will have the ability to seek corrective actions, require companies to change programs to cure violations, as well as, implement enforcement actions.
The CFPB will publish its Examination Manual on their website and offer a general invitation for feedback and comments from the banking industry, nonbank financial service companies, government agencies, consumer groups and the general public.
