Alert November 13, 2012

CFPB Issues Supervisory Highlights Report, Appeals Policy and Updated Supervision and Examination Manual

The CFPB released its first Supervisory Highlights Report. The report, which covers supervision work completed between July 21, 2011 and September 30, 2012, focuses on problems found by examiners and the corrective actions and remedies financial institutions were directed to undertake. The report’s findings include deficient compliance management systems and regulatory violations at financial institutions related to credit cards, credit reporting and mortgage lending. For example, CFPB examiners found instances where the credit limit of a consumer under the age of 21, with an account associated with a consumer 21 or older, was raised without the consent of the co-applicant. Supervisory Highlights reports are expected to be issued periodically for the purpose of keeping the public and financial services industry apprised of the CFPB’s examination program.  

The CFPB also released its appeals policy for supervised institutions, which permits a supervised institution to request a review of a less than satisfactory compliance rating (a 3, 4 or 5) or any underlying adverse finding, as well as any adverse finding included in a supervisory letter. The appeals process is handled by a committee consisting of the management at the CFPB’s Washington, D.C. headquarters and representatives of the regional offices involved in the matter under review.

Finally, the CFPB issued an updated Supervision and Examination Manual, incorporating procedures for the mortgage origination and servicing, payday lending, consumer reporting and consumer debt collection markets.