CFPB Report: 2013-AE-C-021 December 16, 2013
Five of the eight enforcement attorneys we interviewed as part of our sample indicated that they had little or no examination experience prior to joining the CFPB. In addition, we learned that enforcement attorneys did not receive formal training on the CFPB's examination process. We believe that these attorneys should receive formal introductory training on the agency's examination process. Without formal training in this area, enforcement attorneys may not have an appreciation for key aspects of the examination process and may operate in a manner that exposes the agency to reputational risk.
The enforcement attorneys whom we interviewed had varied backgrounds, having previously worked at law firms, federal and state regulatory agencies, and other organizations. Five of the eight enforcement attorneys we interviewed as part of our sample indicated that they had little or no experience related to examinations prior to joining the CFPB.
We learned that enforcement attorneys received ad hoc or "on-the-job" training on the CFPB's examination process. However, interviewees indicated that enforcement attorneys did not receive formal training in this area. A field manager noted that the enforcement attorneys' limited knowledge of the examination process was troubling to some examiners. A senior CFPB official noted that the on-the-job training has been helpful, but a formal introductory course on examinations would be more beneficial. Another senior agency official noted that it would be beneficial for enforcement attorneys to receive formal training in this area, as such training would help to promote consistency during the supervisory process.
Without formal training on the examination process and greater clarity with respect to the roles of examiners and enforcement attorneys, enforcement attorneys may operate in a manner that could expose the CFPB to reputational risk. For example, enforcement attorneys assisting examiners in completing examination procedures may not have an appreciation of the importance of the examination's scope and could inadvertently deviate from the formally communicated scope without realizing the possible consequences of that action. In our opinion, formal training on the examination process would enhance the attorneys' appreciation for key aspects of the examination process, including scoping, fieldwork, and reporting.
We recommend that the Deputy Director and Associate Director for SEFL
Regarding recommendation 4, the Deputy Director and Associate Director for SEFL stated the following:
We concur with this recommendation, and the CFPB is addressing the concerns raised in this recommendation through its new policy on enforcement attorney integration into examinations. CFPB has conducted a series of mandatory training sessions for all SEFL staff, including enforcement attorneys, regarding the new policy and the role of enforcement attorneys in CFPB's examination process. This training provides greater clarity with respect to the roles of examiners and enforcement attorneys. All SEFL staff, including enforcement attorneys, have been required to participate in this training and the CFPB is ensuring compliance with this requirement.
Pursuant to the newly effective policy, CFPB enforcement attorneys generally will no longer participate in on-site examination activities. In addition, the new policy improves procedures regarding communications between enforcement attorneys and examiners by providing for enforcement attorney consultation off-site with the Office of Supervision Policy on legal questions, rather than directly with examiners in the field. CFPB's new policy thus adequately addresses the reputational and other risks identified in the Evaluation Report.
Nevertheless, we are considering additional training to further educate enforcement attorneys regarding the examination process.
In our opinion, the actions described by the Deputy Director and Associate Director for SEFL appear to be responsive to our recommendation. We plan to follow up on the CFPB's actions to ensure that the recommendation is fully addressed.
