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CFPB Report: 2014-AE-C-005 March 27, 2014

The CFPB Can Improve the Efficiency and Effectiveness of Its Supervisory Activities

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Finding 7: The CFPB Has Not Finalized Its Examiner Commissioning Program

The CFPB has not finalized its commissioning program for new examiners. Further, the CFPB uses on-the-job training modules for new examiners and plans to include those in its commissioning program; however, the agency does not track examiners’ completion of these modules. In the absence of a finalized program, the CFPB has implemented an interim program that allows commissioning based on a supervisor’s recommendation. Generally, financial regulators require that examiners complete several training courses, pass proficiency examinations, and demonstrate on-the-job aptitude to become commissioned examiners. The CFPB is in the process of developing its commissioning program. In the absence of a finalized commissioning program, the CFPB has a smaller proportion of commissioned examiners to noncommissioned examiners than peer federal regulators, which may create the appearance that the CFPB’s examination staff is not sufficiently qualified. In addition, by not tracking on-the-job training, the CFPB limits its ability to ensure that examiners have completed all aspects of the commissioning program.

The CFPB’s Commissioning Program Is Not Yet Fully Developed

The CFPB is creating a new commissioning program for its examiners, but at the time of our review, it had not yet finalized all of the commissioning program’s training courses. The CFPB has made progress in finalizing and implementing most of the training courses that will be included in the commissioning program, and examiners have begun to attend the courses. The supervisory training and commissioning programs of financial regulators require that examiners complete several training courses, pass proficiency examinations, and demonstrate on-the-job aptitude. Within the Reserve Banks of the Federal Reserve System, for example, it typically takes an assistant examiner three to five years to complete the requisite training requirements and proficiency examinations to become a commissioned examiner.

The CFPB expects that its finalized examiner commissioning program will include a series of classes covering the knowledge and skills necessary to be a successful examiner, as well as on-the-job training. It will also require a written, validated test designed to evaluate a noncommissioned examiner’s readiness for the duties of a commissioned examiner. The CFPB plans to finalize its courses and roll out the final commissioning program by the end of 2014.

Although the CFPB’s commissioning program has not yet been finalized, the CFPB is commissioning examiners through an interim program. Participation in the interim commissioning program is contingent on a supervisor’s recommendation, which can be made based on an examiner’s display of working knowledge. As of October 2013, the CFPB had 108 commissioned examiners, 20 of which were commissioned through the CFPB’s interim commissioning program. The remaining 88 commissioned examiners were previously commissioned by another regulatory agency. We reviewed the recommendations and found that the commissions appeared appropriate, as the examiners generally had several years of regulatory compliance experience.

The CFPB has a high proportion of noncommissioned examiners, underscoring the importance of a robust training and commissioning program. According to a CFPB senior official, inexperienced examiners at other federal regulatory agencies generally make up about one-third of all examination staff. A June 11, 2013, staffing report showed that the CFPB had approximately 300 examiners, 55 percent of which were below the minimum grade level for commissioning. Operating with such a large proportion of noncommissioned examiners, relative to other federal agencies, can drain resources; a regional director explained that training teams during examinations requires more staff resources and lengthens examination time.

In addition, the lack of training can impact employee satisfaction. This connection is illustrated in the results of the 2012 CFPB Annual Employee Survey, which found that nonmanagerial regional staff were generally dissatisfied with the training they received; 55 percent noted that training needs for their current position were not being met.

On-the-Job Training Is Not Tracked

The CFPB lacks a formal, centralized process to track examiners’ completion of on-the-job training modules. On-the-job training modules, designed to teach new examiners about specific regulations or products during examinations, will be a key component of the CFPB’s finalized commission program. A headquarters official stated that each region should track on-the-job training modules; however, the regional directors stated that although they rely on examiners receiving on-the-job training, they generally have not tracked examiners’ completion of such training. Formally tracking the modules would help to ensure that examiners have completed all aspects of the commissioning program.


We recommend that the Associate Director for SEFL

  1. Finalize the examiner commissioning program.
  2. Monitor examiners’ completion of on-the-job training modules.

Management’s Response

Regarding recommendation 10, the Deputy Director and Associate Director for SEFL stated the following:

We share the OIG’s appreciation of the critical role training plays in enhancing the overall effectiveness of CFPB’s supervisory operations, and we have expended considerable resources in developing training for supervisory staff that reflects the needs and mission of our newly-created agency.

Our examiners possess deep and varied experiences. Our goal remains to recruit high quality talent and to develop future generations of examiners. Given the startup nature of the Bureau, we previously relied exclusively on classes offered by our fellow banking regulators and on-the-job training. This past year, however, we delivered 24 sections (25 to 30 seats each) of three distinct course offerings to our examiners. This represents a new point in the maturation of our internal training and development program.

As part of its comprehensive examiner training strategy, the CFPB has established an Examiner Commissioning Program (ECP) that includes classroom training courses, rotational assignments, access to online training modules, case studies, and a comprehensive commissioning examination. We have developed and fully implemented multiple new classroom courses in areas including operations and deposits, prepaid products, lending principles, fair lending, and other areas.

As the Report notes, we have implemented an interim commissioning program; all commissions issued under this program require the approval of the Associate Director for Supervision, Enforcement, and Fair Lending. The CFPB’s comprehensive commissioning examination is undergoing multiple rounds of content validation and is scheduled to be finalized during the fall of 2014. As noted in the Report, the CFPB is targeting the last quarter of the 2014 calendar year to have all components of the commissioning program fully implemented.

Regarding recommendation 11, the Deputy Director and Associate Director for SEFL stated the following:

The CFPB will enhance our existing monitoring processes to ensure we accurately track completion of OJT modules. In addition, the CFPB is expanding implementation of its formal Learning Management System (LMS) to enable more centralized and automated training documentation.

Management’s full response is included as appendix B.

OIG Comment

In our opinion, the actions described by the Deputy Director and Associate Director for SEFL appear to be responsive to our recommendations. We plan to follow up on the CFPB’s actions to ensure that each recommendation is fully addressed.