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State Coordinating Committee and the CFPB

NACARA ANNUAL MEETING 2014. State Coordinating Committee and the CFPB. Charles A. Vice, Kentucky DFI Commissioner Edwin Chow, CFPB Regional Director Moderator: Chuck Cross, CSBS. The Path to Coordination. SCC Members. CFPB Coordination Leadership. What is NACARA’s Role in Coordination?.

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State Coordinating Committee and the CFPB

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  1. NACARA ANNUAL MEETING 2014 State Coordinating Committee and the CFPB Charles A. Vice, Kentucky DFI Commissioner Edwin Chow, CFPB Regional Director Moderator: Chuck Cross, CSBS

  2. The Path to Coordination

  3. SCC Members

  4. CFPB Coordination Leadership

  5. What is NACARA’s Role in Coordination? • Voting member of the SCC with 2 reps • Leadership on debt collection supervision

  6. The Framework – 05/20/2013 Responsibilities: • Coordinate Examination Schedules • Quarterly Update Meetings • Independent Examination Schedules • Designation of SPC & EIC • Necessary Processes & Additional Protocols • Notices • Corrective Actions Subject to this Framework • Enforcement of Laws, Support Desirables: • Exchange of Information on Independent Exams • Exchange of Information on Non-Independent Exams

  7. Coordinated Examination Schedule • Develop a list of covered entities - The CFPB and the SCC will annually develop a list of Covered Non-Depository Entities that are potentially subject to examination. • MMC: Mortgage Origination and Servicing • NACCA: • Payday Lending • Student Lending • Auto Finance • NACARA: Debt Collector • MMET: Money Transmission, Emerging Payments, VC • Identify list of entities to examine - The SCC and the CFPB will identify Covered Non-Depository Entities that are to be examined under this Framework.

  8. Exchange of Information • Secure means of transfer from CFPB to the States • CSBS filter by MOU and statutory authority • Archiving CFPB documents • Secure delivery upon authority confirmation • Email today . . . Website coming soon! • Secure means of transfer from States to CFPB • CSBS collection of related documents and forward delivery; or • CSBS notification and facilitation of individual state delivery to CFPB • Maintenance and protection of information • Initially for multi-state; phase in single state

  9. CFPB Examination Procedures • Compliance Risk Management Assessment • Focus of review • Part of examination • Time to complete • Industry Product Line (IPL) • Request Letter • Supervisory Letters and Reports of Examination • Enforcement Actions

  10. State Examination Procedures • Mortgage: MMC management and processes • Established and mature • ComplianceEase software for origination exams • Debt Collection: NACARA • Processes in development • Payday Lending: NACCA • IL has the lead for the first exam • Process development early 2015 • Modify CFPB procedures to fit states • Work group will be established • Money Transmitters: MMET • Larger participant rule gives green light • Much work to be done

  11. SCC Expectations • Robust Multi-state Examination Process • Identification of Entities to Examine • Information Flow – CSBS as intermediary • Now – CSBS to States • CSBS Information request – regulatory authority • Future – States to CSBS • Feedback on Process – how do we make it better?

  12. State System is Complicated • There are ultimately 102 agencies to coordinate across at least 9 industries • We can only do this together • Coordination means both multi-state and inter-agency • Single Points of Contact (SPCs) in your agency are our lifeline – keep them current

  13. 2014 Coordinated Exam Schedule • 6 Mortgage Exams • Origination • Servicing • 2 Debt Collector Exams • 1 Payday Lender Exam

  14. 2014 Examination Participation • MMC is overseeing mortgage for the SCC • In the first 3 mortgage exams: • 47 states & 92 examiners are participating • All 4 CFPB Regions • Debt Collection led by CT and ID • 8 states are participating in two exams • 2 CFPB Regions

  15. 2015 Proposed Schedule • 12 to 19 Exams Proposed • Industries to be examined:* • Mortgage Origination (3-5 exams) • Mortgage Servicing (3-4 exams) • Payday Lending (1-3 exams) • Debt Collection (3 exams) • Money Transmitter (2-4 exams) * Based on how you count the #s.

  16. What is Next? • Ultimate Goal – more coordinated examinations • Leverage off each other’s work • Reduced burden on regulated entity • Coordinated Supervisory Actions • Task Force • January 2015 • Review prior coordinated examinations • Coordinated Request Letter • Coordinated Examination Process • Coordinated Report

  17. Questions?

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