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CFPB Report: 2014-AE-C-001 January 16, 2014

Audit of the CFPB's Civil Penalty Fund

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Attachment C: Management's Response

Consumer Financial Protection Bureau Letterhead

1700 G Street N.W.
Washington, D.C. 20552

January 8, 2014

Mr. Mark Bialek
Inspector General Board of Governors of the Federal Reserve System and
Consumer Financial Protection Bureau
20th and C Streets, N.W.
Washington, DC 20551

Dear Mr. Bialek,

Thank you for the opportunity to review and comment on the Office of Inspector General's draft report Audit of the CFPB's Civil Penalty Fund. We have reviewed the report and concur with the recommendations.

We are pleased that you agree that the Bureau has implemented internal controls for the Civil Penalty Fund. Over the last several years, the Bureau has worked to launch and implement the Civil Penalty Fund in a transparent and responsible manner, consistent with all applicable laws and requirements including the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Program milestones include the establishment of the Civil Penalty Fund Governance Board, the development and publication of the Civil Penalty Fund Rule, the development of key internal policies and procedures, and frequent public reporting on collections and allocations.

The information in this report covers policies, procedures and major activities from July of 2010 through November of 2013. Overall, we appreciate that your review has verified for us that the program has been built on a solid foundation.

As the Civil Penalty Fund program continues to develop and mature, we thank you for your review and look forward to additional opportunities for improvement.



Stephen Agostini
Chief Financial Officer



Recommendation 1: We recommend that the CFO, in keeping with current practice, specify in the Procedures for Civil Penalty Fund Administration that the Fund Administrator must collect in writing any case-related data obtained after case settlement to facilitate payments to victims.


Management concurs with this recommendation. The OIG observed that the words “in writing” were not included in an identified section of the OCFO’s Procedures for Civil Penalty Fund Administration. The identified section currently states, “On an ongoing basis, the Fund Administrator will collect and track…information as related to CPF allocation eligibility.” It is OCFO’s practice to collect and track information in writing, and consider “in writing” implicit in the above statement. However, in response to the OIG’s recommendation, the OCFO will add the words “in writing” to the identified section of the procedures document.