Bulletin 2021 01 changes to types of supervisory communications 2021 03

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consumerfinance.gov Consumer Financial Protection Bureau 1700 G Street NW Washington, D.C. 20552

CFPB Bulletin 2021-01 Date:

March 31, 2021 Subject:

Changes to Types of Supervisory Communications

The Consumer Financial Protection Bureau (CFPB or Bureau) is issuing this bulletin to announce changes to how its examiners articulate supervisory expectations to supervised entities in connection with supervisory events. Bureau examiners will continue to use examination reports and supervisory letters as key methods of supervisory communication. Examiners will continue to rely on Matters Requiring Attention (MRAs) to convey supervisory expectations in those reports and letters. The Bureau intends for examiners to use MRAs to communicate to a supervised entity’s Board of Directors, senior management, or both, specific goals to be accomplished in order to address violations of Federal consumer financial law or other laws enforced by the Bureau, risk of such violations, or compliance management system (CMS) deficiencies. Consistent with longstanding policy, the Bureau expects supervised entities to implement a CMS that, among other things, effectively prevents, identifies, and addresses risks to consumers.

Bureau examiners may issue MRAs with or without a related supervisory finding that a supervised entity has violated a Federal consumer financial law. MRAs may specify corrective actions to be taken by the supervised entity, such as changes to practices and operations or payment of remediation to consumers. MRAs provide timeframes for reporting of efforts taken to address these matters, including, as appropriate, periodic reporting and expected timeframes for implementation.

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consumerfinance.gov Effective immediately, the Bureau no longer will issue formal written Supervisory Recommendations (SRs). The Bureau believes that MRAs will more effectively convey our supervisory expectations. Bureau examiners will also continue to provide informal feedback and suggestions to supervised entities as part of the supervisory process. While MRAs are not legally enforceable, the Bureau expects supervised entities to correct the matters identified in MRAs promptly and effectively. The Bureau will consider a supervised entity’s response to MRAs when assessing its compliance rating or otherwise evaluating the risks that its activities pose to consumers and to markets. These risk considerations may be used by the Bureau for purposes including prioritizing future supervisory work and assessing the need for potential enforcement action. The Bureau is committed to using the full range of its authorities to promote compliance with the law and to ensure that supervised entities protect consumers. Rescission This bulletin rescinds and replaces CFPB Bulletin 2018-01 (September 25, 2018).1

1 This rescission is consistent with the Bureau’s rule regarding the Role of Supervisory Guidance, 12 CFR part 1074 subpart B, which does not address the standards for MRAs or other supervisory actions.