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Dreher Tomkies LLP
Attorneys at Law
2750 Huntington Center
41 South High Street
Columbus, Ohio 43215
Telephone (614) 628-8000
Fax (614) 628-1600

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The Federal Reserve recently announced immediately adoption of a policy to implement a consumer compliance supervision program of nonbank subsidiaries of bank holding companies and foreign banking organizations with activities covered by consumer protection laws that the Federal Reserve has the authority to enforce. These laws are (i) the Truth in Lending Act, (ii) the Equal Credit Opportunity Act, (iii) the Home Ownership and Equity Protection Act, (iv) the Fair Credit Billing Act, (v) the Consumer Leasing Act, (vi) the Fair Credit Reporting Act, (vii) the Fair Debt Collection Practices Act, (viii) the Home Mortgage Disclosure Act, (ix) the Truth in Savings Act, (ix) the Real Estate Settlement Procedures Act and (x) rules under the Federal Trade Commission Act. The policy also provides for the investigation of consumer complaints against nonbank operating subs.

The Federal Reserve indicated that the policy builds upon a 2007 pilot program in which the Federal Reserve, along with other federal and state regulators, conducted targeted consumer protection compliance reviews of non-depository subprime mortgage lenders. Consumer compliance examiners will develop risk assessment and supervisory plans. The effectiveness of existing policies and procedures will be assessed and additional guidance issued as needed. In addition, a Consumer Compliance Risk Management rating similar to the rating used by safety and soundness examiners will be assigned to each non-bank subsidiary.

  • Judy Scheiderer and Chuck Gall