CFPB SIGNS MEMORANDUM OF UNDERSTANDING WITH STATE REGULATORS
The Department of Treasury has announced that the Consumer Financial Protection Bureau (CFPB) and the Conference of State Bank Supervisors (CSBS) have entered into a Memorandum of Understanding On the Sharing Information for Consumer Protection Purposes (MOU). See News Release, U.S. Dept. Treas. (Jan. 4, 2011); MOU between CFPB and CSBS (Jan. 4, 2011). The purpose of the MOU is to (i) establish the framework for the parties to establish and enhance the cooperative relationship between the CFPB and state authorities contemplated by the Consumer Financial Protection Act of 2010 and (ii) preserve the confidential nature of information shared by the parties.
The MOU addresses cooperation in the following four specific areas:
- Examination Procedures and Related Information
- Supervision and Enforcement Cooperation
- Confidential Supervisory Information and Personal Information
Under the MOU the parties agree to, among other things, consult each other with respect to the practices used by the various state authorities represented by the CSBS in examining providers of consumer financial products and services. They also agree to work together to enforce federal consumer financial laws and state consumer protection laws effectively and to minimize the regulatory burden on providers of consumer financial products and services operating in multiple states. The Department of Treasury in its statement regarding the MOU described it as an important step in implementing the constructive balance between federal and state regulation of consumer financial products established by the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203 (July 21, 2010) (Dodd-Frank Act) and a starting point for additional state agreements.
The CFPB was created under the Consumer Financial Protection Act of 2010, otherwise known as Title X of the Dodd-Frank Act. The CFPB is charged with regulating the offerings and provisions of consumer financial products and services under the federal consumer financial laws. The CSBS represents various state authorities that supervise institutions and other persons engaged in the offering and provision of consumer financial products and services.
Increased regulation, scrutiny and federal-state cooperation has been expected as the result of passage of Title X of the Dodd-Frank Act (see DTS Alerts dated July 16, 2010, September 15, 2010 and September 17, 2010). The MOU reflects continued progress in that direction.
- Mike Tomkies and Margaret Stolar