A consumer-centered supervision program

Yesterday, we began operation of what will be the largest function within the CFPB: Supervision. As part of this effort, Special Advisor to the Secretary of the Treasury Elizabeth Warren and Assistant Director for Bank Supervision Steve Antonakes signed and sent introductory letters to the CEOs of over 170 financial institutions that are subject to CFPB Supervision. These are depository institutions with over $10 billion in assets and their depository affiliates.

Professor Elizabeth Warren and Assistant Director for Large Bank Supervision Steve Antonakes sign introductory letters to the CEOs of over 170 financial institutions that are subject to CFPB Supervision.

Supervision will serve as consumers’ eyes in financial institutions by assessing whether the institutions are complying with various federal consumer protection laws. If they are not, we will work with other CFPB teams to determine what should be done. In addition to requiring the company to change its practices so they comply with the law, we might also require improved employee training, implementation of better policies and procedures or quality controls, and in more serious cases, monetary compensation to consumers. Our supervision will have a simple goal: to prevent harm to consumers from unlawful financial practices and ensure that markets for consumer financial products and services are fair, transparent, and competitive.

To accomplish this, we are assembling a diverse and talented team of several hundred examiners. They will be based in four satellite offices in Chicago, New York, San Francisco, and Washington, D.C. These examiners will serve as the proverbial “boots on the ground” for consumers. They will travel to the largest banks, to mortgage lenders and servicers, and to companies in other consumer financial markets. They will kick the tires by asking questions, observing activities, and collecting data. For example, examiners will look at transaction records or observe call centers. These activities enable us to assess institutions’ compliance with the law and the quality of their internal processes for ensuring compliance.

Our examination process will strive for transparency, efficiency, and fairness. It will not be about “gotcha.” We will communicate with institutions throughout the examination cycle. In most instances, institutions will be advised of upcoming examinations well in advance of the start of our examinations. We will keep the institution informed of the examination’s status and findings during the course of our review. We will meet with management to discuss our findings and conclusions prior to finalizing our exam report. We will work constructively with institutions to address compliance risks and issues as well as to strengthen their compliance programs and practices. And we will keep the public informed of supervision activities through aggregate quarterly reports – while maintaining the confidentiality of supervisory information.

We expect this communication to go both ways. Our examination process will improve continuously, based not only on input from examiners in the field, but also on feedback from the organizations we supervise and other interested parties.

The CFPB will coordinate its supervision efforts with other federal and state regulators. They will continue to have important responsibilities for overseeing the safety and soundness of depository institutions, as well as an important continuing role in consumer protection. We understand and place a very high value on their primary mission of ensuring that banks, thrifts, and credit unions are run in a safe and sound manner so they remain trusted and reliable deposit holders. Indeed, many examiners will join the CFPB from safety and soundness-focused regulators. We will also share information with these regulators and will coordinate exams with them. This understanding, appreciation, and coordination will help to ensure that the CFPB carries out its consumer-centered mission in a manner that is sensitive to safety and soundness considerations and minimizes regulatory duplication.

Examiners will also work closely with colleagues throughout the CFPB. When consumers submit complaints to the CFPB, the Consumer Response team can relay to examiners any trends those complaints reveal. Our offices focused on the needs of Older Americans, Students, Military Servicemembers, and underserved consumers and communities will flag issues for our examiners to review. Economists in our Research group and analysts in our Markets offices will communicate their latest findings to better inform our field work. And, generally as a last resort, examiners will coordinate and work closely with CFPB’s Enforcement staff to implement appropriate enforcement actions to address violations of law that harm consumers.

In the coming weeks, we will communicate more details about our supervision policies and procedures. If you have questions you would like us to consider, please leave them in the comment section below. We look forward to hearing from you.

Peggy Twohig is the Assistant Director for Nonbank Supervision. Prior to her work at the CFPB, Ms. Twohig was Director of the Office of Consumer Protection at the Department of the Treasury, where she worked on the proposal to create a new consumer agency as part of financial regulatory reform. Immediately before joining Treasury, Ms. Twohig served as Associate Director of the Division of Financial Practices at the Federal Trade Commission, focusing on enforcement and policy issues related to consumer financial services.

Steven Antonakes is the Assistant Director for Large Bank Supervision. He was previously appointed by successive governors to serve as the Commissioner of Banks for the Commonwealth of Massachusetts. In that capacity, he supervised over 250 state-chartered banks and credit unions and over 5,000 non-bank entities, oversaw the development and implementation of the Nationwide Mortgage Licensing System, and became the first state voting member of the Federal Financial Institutions Examination Council.

Salome

Here’s a suggestion: Promulgate a rule that banks have to give a customer the same rate of interest on a savings accounts that they charge that customer for a credit card.

get a life…

I got an idea, don’t default on your debts, and the rates may not be so outrageous!
Ali

I agree that savings account rates are too low, however to imply that credit card interest is purely profit for a financial institution is just incorrect. Those rates help pay for the service you are receiving such as fraud monitoring and reimbursements, merchant service fees and not to mention wages for employees who are luck to say they have an employer in this economy.
We need to start looking at the big picture in order to solve these problems, like what needs to be done so that the feds can start raising the rates banks use to base their savings account rates on… not just jumping to conclusions about who to blame.

Seenthelight

It is really hard to believe that 16 or 18% interest is reasonable but I don’t know that for a fact. What I do know is that if people lived within their means and paid their bills off on a monthly basis the problem discussed here between Salome and Ali would go away. However, living in this society based on entitlements, narcissism and greed I don’t see much hope for things to change right away. Once again I blame Congress as the little people (us constituents) tend to emulate the rich and powerful (senators and representatives), never the other way around. It’s like any addiction, I guess, we have to hit bottom before we start to change. “We have met the enemy and he is us” – Pogo (Walt Kelly)

Realestate_leader

How would they make a profit ? If they cant make a profit they cant excist at all. Banks use our money to make money. How would they pay employees, rents ,expenses, They could use the money they have on deposit but then all the folks that do not have a credit line and are getting paid interest would be carrying the burden and the bank would lose the depositors money, then the FDIC would cover it and we would be making the deficit larger leaving our children to pay our debt. Good plan

Kellenford

This is such an exciting development. Like many Americans I have struggled with credit reporting and debt collection from the unreasonable fees and interest to inaccurate information on a credit report damaging my life. I hope these watchdogs will be able to have some impact.

Realestate_leader

Credit reporting agencys should be more acessable to the public ,if there is a problem consumers shouldnt need to jump through hoops to fix those problems.

Realestate_leader

I really hope these guys do not negativly affect the banking industry in a manner that will trickle down to the Realestate market we have been hit hard enough and so many other american jobs depend on a florishing real estate market.
Lfeatherly

OMG Finally!!! When I first opened my business in 1999 it was shameful to have an overdraft. It was like $4-$6 fee and if you had more than 3 in a month or two the Bank would close your account. That was fine. But then ” Check 21″ came into play (which I thought was only a trial basis) And All Hell broke loose. It became a Free For All for Banks! All your paper checks became electronic and duplicated, not much was original anymore. I have copies of electronic checks from on-line banking that have the Tracking Numbers “whited-out” by BOA and dates changed or blurred so you can’t read when they were deposited, and deposit slips that have been rewritten on the front but still the same as when I handed it to the bank on the back. My transactions are manipulated to cause an overdraft. Oh and lets not forget about the lovely Debit Card/Credit Card!! I never gave any Bank my permission to change my simple Debit Card which withdrew directly out of my checking account immedialtely.. if the money wasn’t there it would say “Declined” to a Visa-MasterCard!! A Debit card was suppose to replace Paper Checks ONLY to save time and money at check outs (False advertisment). Now as a Business owner I get charged a fee no matter how it is swiped… and now some of those transactions for comsumers will sit in a “Pending’ for up to 5 days waiting for it to so-call clear??? why? it was already approved at the vendor end. I know, I know… if I was responsible with my money I wouldn’t be having $900 (2007)in a month and almost $25,000 year to date of Overdraft Fees/Insuff fees. I am a responsible single mother, homeowner, busines owner.. I count every penny and count on every penny to survive. But these Banks are bringing in over $40 Billion a year in overdraft fees a year yet they still needed a Bail out? I used to blame myself and became very depressed until I started reading the Testimony of Jean Ann Fox, Director of Consumer Affairs. In it proved that I wasnt the only person experiencing these problems. It proved that something is seriously wrong with the Banking System otherwise why would we need a Bank Reform? I truly believe you can’t fix this economy and be fair to everyone by changing the rules in the middle of the game..it will only make matters worse cause now you are admitting to cheating, wrong doing and the rules were wrong (think of the lawsuits then) you need to go back to the beginning were it began possibly “Check 21″ RETURN these Rediculus Bank Fees and come back to reality. It would actually be a Win Win for the Banks too cause $40 Billion dollars times it by years would be back into circulation in the economy not sitting in one spot.. where ever that may be?? We have to use the Banks in order to spend it…. We could pay our mortgages, and buy stuff again. We would be able to use our money for what we earned it for!!! JUST GIVE IT BACK PLEASE BEFORE ITS TOO LATE !! Oh and I forgot Lovely NYS charges me to use my Child Support Debit Card… up $3.90/ transaction… cause not all banks accept it, and it would cost me that to drive to a bank that does. Thanks, Sorry had to vent.. Blast away.
Gabrielseal7

Hello, My file would be the best in answers resolution and a great Blue Print, for mortgage bank and invester and government< servicer abuse, for all I have been in my home for 22Yrs. And have made numerous discoveries of inaqaurate recordslost funds and malnipulation and fraud of a federal document, lost funds in transfers etc. on and on.I have never refi., nor bankrupsty, nor foreclosure, I was once a sec.,held land, survied the assignment program where alot of this fall began for thousands 1996 HUD. The name of my pool is Salmon Brother Inc.Hud Trust ll 1997, those of you in this new insitutionCFB and large bank sup will know what I'm speaking of. Needless to say I have been bounced, ignored, handled with very little professinalism with the OCC, with this insitution playing within gray areas in hope of myself going away, yet my file and is true paper of 22yrs. and record will show horiffic abuse on paper from all parties involved. The new consent order by OCC had to finally happen, or the OCC would be view as having a blind Eye, as Treasury as well. Please have your brightest light contact me for your discoveries and investagation of large bank supervision, asap so you door maybe opened wider of seeing, what is also interesting responsible lending in washington wrote and warned of the banking atrousaties in 2005 while some abuses happened on paper.
Sunshine Wall Street

Finance
reform had my support when the object was to reign in the Wall Street
banks that put us this global crisis we’re still stuck in. I am much more skeptical now, because now we’re
talking about regulating non banks, and it has become a distraction from
that original promise of reform.
JackQ

Dear Ms. Warren:

The one thing that
bankers, brokers and stock companies can’t live without is the “little guy’s”
little deposits and small investments. After the financial sharp practices and
ultimate disaster of the past few years and periodic events going back to 1989,
the “little guys” who got hurt would be happy to know how to exact some
retribution from their bankers, brokers and other mortgage and money manipulators
who played the “little guy’s” ignorance to big advantages.

The key element needed
is to turn the consumer into a tough contender for what is right and deserved. In
the country’s deteriorating educational climate, the way to educate and
activate the “little guy” in his own interest is to reach him in his own
language and through his habitual channels. Besides getting lessons listened
to, creating the communications could be fun, though serious fun. Well, done,
educating the consumer could become an entertainment with its own life; so much
the better and more effective. Having everyone talking about it; that’s
effective education. What does the duck do for Aflac? The polar bears for
Coca-Cola? What did Archie Bunker do to sacred cows? How does the “little guy”
get his information today?

From rockers, rap,
hip-hop, I-pods and I-pads, Twitter, Facebook, You-Tube videos (that could go
viral), texting, graphic novels. The American culture is into athletes, heroes,
celebrity!, and being impressed by big money or notoriety. Culture in the
refined sense has little to do with American life. Unleash all these actions on
the financial world and see how fast Americans wise-up.

Financial
businesses over the years have performed in a revealing way that places their
concerns in an anti-consumer/customer order. In the financial industry’s Bible
of what’s most important, the top first is “The Bottom Line”.

Down at the very
end, where one might sadly expect “responsibility” and “ethics”, there is
nothing, an absence of responsibility to shareholders and customers. At least,
with antagonism there is entity, but indifference – the absence of concern –
turns the consumer and shareholder into ciphers. Most American citizens become
potential victims of financial industry – well – pure greed.

The financial industry’s
customer interaction has been deteriorating so long and intensely that the very
concept of ethical transaction (fair and mutually positive) is not even a
tell-tale blip on financial industry radars. It doesn’t fit into their day’s
business or even twinge a conscious once in awhile. “I’ve got my mother in
this!” Everyone is fair game for exploitation. Any tactic, strategy or sharp
practice is acceptable as long as it produces a profit and they can get away
with it; let the unwary beware. Let the unwary wise-up. Enough of where I’m
coming from. Have I experienced any of this? Yes.

The fastest way to warn
consumers about financial sharks and unethical warning signs is to entertain
“the little guy” with learning tools that make him smile or even laugh at his
“account executive”, his cheapskate (.01% interest-high fee) bankers, at insider
yes-men Boards of Directors. With learning that keeps him interested,
entertained and supplies him with a little one-upmanship on the big-shots.

The way to bring
financial sharks to their knees is to make fun of them in the consumers’ own
language and venues while at the same time educating the consumer on one point after
another like episodes in a TV series. The umbrella theme will educate the
consumer and lead him to make up his own mind what’s good or not for him; the
consumer public, the mass of “the little guys” can become to the financial
industry what the Tea Party is to politics.

I was a businessman
(very ethical – I called it earning my profit by looking out for my customers,
even the things they didn’t know) for years and now have been a substitute
teacher in high school for ten years. Americans are becoming less educated and
more seduced by the distractions of electronic devices. This is not just kids,
but grownups. Just look around when you walk down the street or go shopping.
What do you see, what do you hear? The way to educate consumers is in their own
language: what do they understand, HOW do they understand?

Who knows, if we
have enough fun tearing up these wheeler dealers, we may embarrass some of them
into some fair play in dealing with poor little suckers off the street, or
shame Boards of Directors into looking out for stockholders, and save fighting with Congress and “special
interests” to get some regulations passed (when they’ll be too little, too
late). With a smart consumer time wouldn’t have to be wasted dealing with
Congress.

If I can help or
you’d like to talk, I’d like that, too.
JackQ

It would also be nice if your agency had a list of e-mail addresses for the public to write directly to one/any of you folks. But it looks like you don’t want to get quite that close to “consumers”. I’d be more comfortable if what was originally my letter could, at least, have been send-able as an e-mail to the person I wanted rather than a blog comment. Who in the agency reads blogs?
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Diane Dau

Is there a way to file a complaint with you against Bank of America?

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