It’s amazing what you can learn if you just ask. The recent needless confusion over a Consumer Financial Protection Bureau information request is a prime example of why it is important to ask the right people the right questions.
After recently receiving a series of panicked messages from community bankers from coast to coast about an information request from the CFPB, ICBA immediately went into detective mode to find out the truth. After a couple brief exchanges with the CFPB to get the facts, we were able to clear up the confusion.
So, here are the facts. The rumor mill began churning on Wednesday with a series of emails to community bankers claiming that the CFPB ordered approximately 200 banks (including some community banks) to provide information as part of a CFPB effort to examine the institutions. The inaccurate emails said the affected banks were sent a fax and asked to file a copy of their standard form account agreement for consumer checking account products by Oct. 11. According to the emails, the CFPB had not informed other regulators of their request.
Needless to say, many community bankers who received the emails were alarmed and confused. Fortunately for them, and the rest of us,
these emails were utterly false and misleading.
Turns out, the CFPB’s request was sent as part of its “market monitoring” mandate, which directs the bureau to monitor for risks to consumers in the offering of financial products and services. It was not part of any examination effort. (Quick reminder: the CFPB does not have examination authority over community banks with less than $10 billion in assets.) Further, the request was faxed to two banks—not 200—and the CFPB did, in fact, inform the prudential regulators about the request.
In my own communications with CFPB Director Richard Cordray about this matter, he was clear that the bureau has no intention of examining community banks or even using its “ride-along” authority to participate in a sampling of community bank exams conducted by prudential regulators.
So, I’m glad that’s cleared up, though I am a little curious as to why hundreds of community bankers were put through such a state of panic and confusion for no reason. The original emails that distracted these hardworking individuals from running their businesses were absolutely false and unnecessary—so misinformed that it’s hard to believe anyone would send them in good faith.
In the future, I encourage community bankers nationwide to feel free to check with anyone at ICBA if they have questions or concerns about regulations, compliance or any other issue. ICBA has your back.
It’s amazing what you can learn if you just ask. The recent needless confusion over a Consumer Financial Protection Bureau information request is a prime example of why it is important to ask the right people the right questions.