When it makes its debut on July 21, 2011, the Consumer Financial Protection Bureau (CFPB) intends to immediately launch its supervision program for large banks.

In a release issued on July 12, 2011, the CFPB outlined its approach for exercising its supervisory authority over the 111 depository institutions that have total assets of more than $10 billion and their subsidiaries and affiliates. According to the CFPB, these institutions collectively hold more than 80 percent of the banking industry’s assets. This supervisory authority was given to the CFPB by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

In preparing for its new role, the CFPB reviewed information from federal and state regulators about the depository institutions for which it will be responsible. Highlights of the CFPB’s supervisory program include the following: 

  • CFPB examiners, expected to eventually number several hundred, will be managed out of satellite offices in Chicago, New York, San Francisco, and Washington,  D.C. More than 100 examiners will be transferred by the end of July from the Federal Deposit Insurance Corporation, Federal Reserve System, Office of the Comptroller of the Currency, and Office of Thrift Supervision.

  • Although most institutions will be subject to periodic examinations, the CFPB will implement customized, year-round supervision programs for “the largest and most complex banks in the country.” Examiners will look at a bank’s compliance with requirements during the entire life cycle of a product or service, evaluate its policies and practices for fair lending compliance, and “when necessary ... coordinate and work closely with the CFPB’s enforcement staff to implement appropriate enforcement actions to address harm to consumers.”

  • Beginning July 21 and continuing over the following “several weeks,” the CFPB will conduct “outreach” to banks and affiliates that fall under its jurisdiction “to establish channels of communication and to introduce them to the agency’s supervision and examination process.” It will issue letters providing additional information, conduct informational roundtables, starting in early August, and post the initial phase of its Examination Manual on its Web site with an invitation for feedback. During this period, in addition to gaining familiarity with the organizations they will supervise and finalizing supervision and examination plans, the CFPB’s managers and examiners will communicate and coordinate their efforts with “federal and state regulatory agencies.”

Ballard Spahr’s Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws throughout the country, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs). For more information, please contact group Chair Alan S. Kaplinsky, 215.864.8544 or kaplinsky@ballardspahr.com; Vice Chair Jeremy T. Rosenblum, 215.864.8505 or rosenblum@ballardspahr.com; John L. Culhane, Jr., 215.864.8535 or culhane@ballardspahr.com; Barbara S. Mishkin, 215.864.8528 or mishkinb@ballardspahr.com; or Mark J. Furletti, 215.864.8138 or furlettim@ballardspahr.com.


Copyright © 2011 by Ballard Spahr LLP.
(No claim to original U.S. government material.)


All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.