Business Conduct: Self-Policing, Self-Reporting, Remediation, and
Cooperation, affirms the significance of an institution’s responsiveness to violations when supervisory enforcement decisions
are contemplated. For the CFPB, responsiveness measurements
include “concrete and substantial benefits” afforded to affected
consumers. While not defined in the policy, references to “concrete
and substantial benefit” and “additional meaningful remedies
for any harm they experienced,” suggest more corrective action than what is occurring now. http://files.consumerfinance.
gov/f/201306_cfpb_bulletin_responsible-conduct.pdf
Perception #3: The incidence of misunderstandings, different interpretations, or disagreements is increasing. Common questions include
“Is it a violation?” “What law does it violate?” “Is it substantive or
technical?” “Do I agree with the recommendation?” UDAAP and the
fair lending laws are the most vexing in this area. For example, does
a system glitch precluding stop payment of preauthorized electronic
fund transfers violate Regulation E, UDAAP, or both? Does the mere
existence of a discretionary policy in and of itself constitute willful
discrimination? While these are examples of big-ticket debates, the
outcome matters because it will dictate the extent of corrective action.
What’s the Disconnect between the Regulators’
View and the Industry View?
Three communication gaps seem to be contributing to the differing views between the industry and the regulators. Here are
the gaps, the agency response, and solution strategies emerging from industry experiences shared during the survey.
Communication Gap #1: There is insufficient clarity regarding expectations that may not be fully articulated in writing. For example, what
is expected for a MRA versus a recommendation, or an observation?
Agency Response: Additional agency guidance to clarify expectations and communicate modifications to “exam management”
protocols, for example:
■ ■ ■ Federal Reserve Board: SR 13-13/CA 13-10-Supervisory Considerations for the Communication of Supervisory Findings (June 17,
2013): www.federalreserve.gov/bankinforeg/srletters/sr1313.pdf
The guidance clarifies requirements for addressing MRIAs
and MRAs, removes the term “observations” from the
standard nomenclature use to communicate findings, and
advises examiners to treat matters that warrant action as
MRIAs or MRAs.
Table #1
CFPB: Examination Report Template and Instruction http://files.consumerfinance.gov/f/supervision-manual/PartIIICFPBsupervisionmanual.pdf
FDIC: Communications of Findings http://www.fdic.gov/regulations/compliance/manual/pdf/II-5.1.pdf
Exam Report Sample – Template http://www.fdic.gov/regulations/compliance/manual/pdf/III-5.1.pdf
New Classification System for Citing Violations in Reports of Examination- FIL-41-2012 http://www.fdic.gov/news/news/financial/2012/fil12041.html
Federal Reserve: SR 08-1 / CA 08-1 Communication of Examination/Inspection Findings http://www.federalreserve.gov/boarddocs/srletters/2008/sr0801.htm
OCC: Comptroller’s Handbook: Bank Supervision Process–Appendix I: ROE Content, Structure, and Review Requirements
http://www.occ.gov/publications/publications-by-type/comptrollers-handbook/bsp-2.pdf
Corrective Action Options Is it required by law? Is it a regulatory expectation? Is it just good for reputation/ customer service?
Make the identified complainant(s) whole?
1. Reimburse the fee, and keep the service with the customer?
2. Give customer the opportunity to cancel the service and
reconsider?
3. Both?
Survey other customers of the service to ascertain if they were aware
of the fee and, if not, give them one of the options above.
Just revamp your disclosure process to ensure future compliance.
