The Consumer Financial Protection Bureau (the Bureau) recently entered into a Memorandum of Understanding on Supervisory Coordination (the MOU) with the Board of Governors of the Federal Reserve System (the Federal Reserve Board), the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (collectively, the Prudential Regulators). The existence of the MOU was disclosed today, though it was signed on behalf of the Bureau and the Prudential Regulators on various dates in early- and mid-May 2012 and it became effective on May 16, 2012. Congress mandated coordination of supervisory activities and sharing of examination reports among the Bureau and the Prudential Regulators in various sections of Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
The MOU applies to certain examinations conducted by, and certain supervisory activities of and information sharing among, the Bureau and Prudential Regulators with respect to (a) insured banks, thrifts and credit unions with more than $10 billion in total assets, and their depository and non-depository affiliates, and (b) non-depository subsidiaries of banks, thrifts and credit unions with $10 billion or less in total assets. (The Bureau and the Federal Reserve Board plan to enter into a separate agreement with respect to holding companies and their subsidiaries.)
The supervisory activities covered by the MOU include: evaluation of compliance with with federal consumer financial laws and certain other laws; obtaining information about activities subject to such laws and related compliance systems and procedures; detecting and assessing risks to consumers and to markets for consumer financial products and services; consumer compliance risk management programs and systems (including vendor management); underwriting, sales, marketing, servicing, collections and other activities related to consumer financial products and services; and other matters mutually agreed upon between the Bureau and a Prudential Regulator.
Pursuant to the MOU, the Bureau and each Prudential Regulator will designate a point of contact for each covered institution. Those points of contact will consult regarding the scheduling, and any material changes in timing, of regularly scheduled examinations of each covered institution and will agree to a reasonable timetable for sharing scheduling information for the coming year or supervisory cycle.
The agencies will generally conduct point-in-time examinations and prescheduled targeted review examinations in a simultaneous (though not necessarily a joint) manner; however, a covered depository institution may request that examinations be conducted separately, and the Bureau may ask a covered depository institution to make such a request so that the Bureau may conduct concurrent examinations of affiliated entities which are regulated by different Prudential Regulators. The agencies have agreed to provide each other with the maximum practicable prior notice of supervisory activities that are not included in the annual schedule of examinations.
The Bureau and Prudential Regulators will share with each other examination request letters and draft examination reports, and they will have up to 30 days to provide comments on draft reports to the issuing agency prior to issuance of final examination reports.
The agencies have agreed to share with each other supervisory letters, memoranda of understanding and other supervisory actions, appeals of material supervisory determinations and the relevant agency’s response, final examination reports (including those with respect to depository institutions with total assets of $10 billion or less), and other supervisory information which the agencies may agree to share.