Why the CFPB matters even if it isn’t your regulatory agency

by: Dennis Agle

Hard to imagine now, but a mere handful of years ago, the abbreviation “CFPB” was perhaps best known for standing for the Center for People and Buildings, a non-profit group operating out of the Netherlands. How times have changed. Today, you can’t throw a stick anywhere in the compliance news landscape without hitting at least a few items either from or about the agency that likes to refer to itself as “The Bureau.”

Some may disregard reports from and about the Consumer Financial Protection Bureau, because they understand that it only directly regulates large financial institutions in excess of $10 billion. However, even if your bank or credit union is far beneath that threshold, the CFPB matters. Here’s why.

Until the CFPB came along, compliance matters were generally regulated by agencies which also had oversight of the financial institution’s overall fiscal health in order to protect the deposit insurance or share insurance funds. Now, since the creation of the CFPB through Dodd-Frank in 2010, there is an agency specifically devoted to protecting consumers and using its full enforcement powers first and foremost to promote compliance with consumer regulations. Your financial institution’s overall fiscal health is not their concern.

It’s a significant shift in focus that is certain to change things for those institutions regulated by the CFPB. However, while the agency only directly regulates financial institutions with assets greater than $10 billion, its reach does not end there. A scan of financial institution news sites (surely your favorite of which is our riskinbox.com) demonstrates why. Today, as I write this post, for example, I see that about half of the items on Risk Inbox mention the CFPB directly.

continue reading »