CFPB Should Reassess Approach to Integrating Enforcement Attorneys Into Examinations and Enhance Associated Safeguards

by Sabrina I. Pacifici on December 18, 2013

Office of Inspector General – Evaluation Report 2013-AE-C-021. The CFPB Should Reassess Its Approach  to Integrating Enforcement Attorneys  Into Examinations and  Enhance Associated Safeguards. December 16, 2013.

“The CFPB should determine the appropriate level of enforcement attorney integration into examinations by reassessing the potential risks associated with the practice against the potential benefits and document the results of the assessment. Our evaluation results indicated that the CFPB’s February 2012 policy describing the general principles of the integrated approach did not sufficiently detail how the approach should be implemented and was not uniformly distributed to CFPB supervision and enforcement staff. As a result, CFPB supervision and enforcement staff’s awareness, understanding, and execution of the policy, as well as their messaging to supervised institutions concerning the role of enforcement attorneys in examinations, varied considerably. During our evaluation, we also learned that enforcement attorneys did not receive formal training on the CFPB’s examination process and that the CFPB lacked a policy on enforcement attorneys’ access to institutions’ systems during examinations. We believe that opportunities exist to enhance awareness of management’s expectations regarding the integrated approach and the procedural safeguards associated with the practice.  In addition, we learned that the CFPB reorganized its supervision function in December 2012 and established points of contact within the Office of Supervision Policy to address legal questions that arise during examinations, in part to ensure more consistent interpretations of applicable laws or regulations. As of the end of our fieldwork, August 2013, the CFPB had not updated its February 2012 policy describing the integrated approach to reflect changes to the process for resolving legal questions.”

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