Coordination of Responsibilities Among the Consumer Financial Protection Bureau and the Prudential Regulators—Limited Scope Review

Background

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) consolidated many of the consumer financial protection authorities previously shared by several federal agencies into the CFPB and granted the CFPB authority to conduct rulemaking, supervision, and enforcement with respect to Federal consumer financial laws;³ handle consumer complaints and inquiries; promote financial education; research consumer behavior; and monitor financial markets for risks to consumers. The CFPB's oversight responsibilities for financial institutions are described below.

Institutions with Assets Over $10 billion (Very Large institutions). Section 1025 of the Dodd-Frank Act applies to insured depository institutions and credit unions with more than $10 billion in total assets. This section grants the CFPB exclusive authority to examine these institutions and their affiliates for compliance with Federal consumer financial laws, such as the Equal Credit Opportunity Act and the Real Estate Settlement Procedures Act. Section 1025 of the Dodd-Frank Act authorizes the CFPB to require reports and conduct periodic examinations of Very Large institutions to: 

• Assess compliance with the requirements of Federal consumer financial laws, 
• Obtain information about the activities subject to such laws and the associated compliance systems or procedures of such institutions, and 
• Detect and assess associated risks to consumers and markets for consumer financial products and services.

The prudential regulators retained authority for examining Very Large institutions for compliance with certain other laws related to consumer financial protection, including the Community Reinvestment Act, the Fair Housing Act, and section 5 of the Federal Trade Commission Act. Attachment 1 of this document identifies the Federal consumer financial laws the Dodd-Frank Act transferred to the CFPB, for which the agency has examination responsibility, and laws for which the prudential regulators retained examination responsibility.

Institutions with Assets of $10 billion or Less (Other institutions). Section 1026 and 1061(c) of the Dodd-Frank Act apply to insured depository institutions and credit unions with total assets of $10 billion or less. Under the Dodd-Frank Act, the prudential regulators retained examination and enforcement authority of Federal consumer financial laws for these institutions. Nevertheless, the Dodd-Frank Act allows the CFPB, at its discretion, to include its examiners on a sampling basis of examinations performed by the prudential regulators to assess compliance with Federal consumer financial laws. In such instances, the prudential regulators shall: 

• Provide all documentation related to the examination process for any institution included in the sample on a timely and continual basis; 
• Involve CFPB examiners in the entire examination process; and 
• Consider CFPB input into the examination scope, conduct, report content, and rating.

• 3. Section 1002 defines the term "Federal consumer financial law," in part, by reference to 18 enumerated consumer laws. See Attachment 1 for further details. Return to text