CFPB Rapid Response Team OVERVIEW OF THE CFPB The Consumer Financial Protection Bureau (CFPB) was created in response to the 2008 credit crisis to promote consumer protection by consolidating the authority to enforce consumer protection laws and regulations in a single agency within the federal government. Launched from the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB consolidates operations previously spread across several different federal agencies, including the Federal Reserve, the Federal Trade Commission and the Federal Deposit Insurance Corporation. The key functions of the CFPB include: 1. regulation and rulemaking 2. supervision and examinations 3. enforcement
Regulation and Rulemaking With respect to regulation and rulemaking, the CFPB implements and enforces federal consumer financial laws to ensure that all consumers have access to markets for consumer financial products and services that are fair, transparent and competitive. The CFPB's rulemaking process typically starts with research and is further informed by public input, including field hearings, consumer and industry roundtables, advisory bodies and in some cases, small business review panels. The CFPB attempts to assess the benefits and costs of the regulations it considers, and proposed rules are published to give industry members, consumers and other external stakeholders opportunities to comment on their potential impacts. Supervision With respect to supervision, the CFPB has supervisory authority over: banks, thrifts and credit unions with assets over $10 billion nonbank mortgage originators and servicers, payday lenders and private student lenders of all sizes large market participants of other consumer financial markets, including debt collection, credit reporting, student loan servicing and auto financing Examinations The CFPB conducts examinations to ensure that supervised entities are complying with federal consumer financial law. The CFPB's Supervision and Examination Manual is the guide for examiners to use in overseeing companies that provide consumer financial products or services. The CFPB ends an examination by providing the examinee with a report setting forth a compliance rating and any identified concerns. The report provides a detailed summary of the examination, a discussion of areas of concern, and potential deficiencies and action items for remediation. Although the CFPB encourages proactive self-correction, it may conclude that some circumstances may be sufficiently serious to warrant a public enforcement action. If an examination matter is referred for enforcement, the CFPB has authority to bring an administrative proceeding or file a civil complaint in federal district court. Enforcement With respect to enforcement, the CFPB has power to investigate any company that is a "covered person" under the Dodd-Frank Act. A law enforcement investigation commences with a company's receipt of a governmental subpoena or a Civil Investigative Demand, which may seek the production of documents and/or information. During the process, which can take well over a year, formal testimony or investigational hearings can also take place. These investigations can result in settlement agreements, or Consent Orders. Frequently, the CFPB engages in litigation against the targets of these investigations. The CFPB can also make referrals to other agencies, and although the CFPB does not have criminal enforcement authority, it can refer a company or individual to the U.S. Department of Justice for criminal violations.
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