CFPB Compliance
Our Federal Lawyers and Consultants Provide Comprehensive CFPB Compliance Services to Financial Institutions and Businesses Nationwide
CFPB Compliance Team Lead
Former DOJ Trial Attorney
Contact John directlyThe U.S. Consumer Financial Protection Bureau (CFPB) vigorously enforces financial institutions’ and businesses’ compliance obligations, and the discovery of non-compliance during an audit or investigation can have serious consequences. In 2022, the CFPB ordered Regions Bank to pay $191 million for charging prohibited overdraft fees and fined U.S. Bank $37.5 million for opening sham customer accounts—and these are just two of numerous examples of CFPB enforcement actions triggered by non-compliance during the year.
With this in mind, financial institutions and businesses that are subject to the CFPB’s oversight need to make compliance a priority. At Oberheiden P.C., we provide comprehensive CFPB compliance services to financial institutions and businesses nationwide. Whether your institution’s CFPB compliance program needs an overhaul or you are starting a business or subsidiary that needs to address compliance from square one, we can offer a custom-tailored solution that meets your institution’s or business’s needs.
Financial Institutions and Businesses Subject to CFPB Compliance
We work with all types of financial institutions and businesses that are subject to the CFPB’s oversight and enforcement authority. The CFPB is responsible for enforcing the federal laws and regulations that govern consumer financing, and these laws and regulations apply to a broad range of entities. For example, entities that need to prioritize CFPB compliance include (but are not limited to):
- Automobile Financing Providers
- Banks
- Consumer Debt Collection Agencies
- Consumer Reporting Agencies
- Credit Unions
- International Money Transfer Agencies
- Nonbank Mortgage Originators and Servicers
- Payday Lenders
- Private Student Lenders
- Student Loan Servicers
The consumer finance laws and regulations that apply to these (and other) entities are constantly changing. This reality adds to the complexity and challenges of managing CFPB compliance. At Oberheiden P.C., we stay up-to-date on the latest developments; and, when a change affects a certain subset (or all) of our clients, we work proactively with these clients to ensure that their CFPB compliance programs remain adequate.
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Our CFPB Compliance Services
Our CFPB compliance services are designed to ensure not only that our clients are in compliance, but that they are prepared to demonstrate their compliance to the CFPB when necessary. In broad strokes, this is a three-step process: (i) establishing compliance, (ii) maintaining compliance, and (iii) documenting all aspects of the compliance program. Our lawyers and consultants work closely with our clients throughout the process, and we tailor our compliance services to each of our clients’ unique operations, risks, and needs.
At Oberheiden, P.C., we offer initial and ongoing CFPB compliance services including:
CFPB Compliance Needs Assessments
Financial institutions and businesses involved in different aspects of consumer financing have different—and often very different—compliance obligations. As a result, when it comes to establishing CFPB compliance, one of the first critical steps is determining which laws, rules, and regulations apply. Broadly speaking, the CFPB divides regulated entities’ compliance obligations into five categories:
- Consumer Lending (Including Auto Lending, Student Lending, and Payday Loans)
- Deposit Accounts and Services
- Mortgage Lending
- Prepaid Cards and Other Consumer Cards
- Other Applicable Requirements (Including Credit Reporting, Equal Credit Opportunity, and Debt Collection)
To determine what our clients need to do, we conduct comprehensive CFPB compliance needs assessments. We do this for clients that have existing compliance programs and for those that do not. As overlooking even a single pertinent aspect of CFPB compliance can create significant exposure, it is imperative that regulated entities begin their compliance efforts with a clear understanding of where their needs lie.
CFPB Compliance Programs
Once our lawyers and consultants determine a client’s specific needs, we then shift our focus to developing a custom-tailored CFPB compliance program. Our CFPB compliance programs address all aspects of our clients’ operations, and they take into account all pertinent sources of statutory and regulatory authority.
Along with providing our clients with documented policies and procedures, we also assist our clients with CFPB compliance program implementation and training. Both of these are vitally important, as failing to adhere to a documented CFPB compliance program is just as bad as—if not worse than—failing to adopt a compliance program at all. Here too, we take a custom-tailored approach, working with our clients’ Chief Compliance Officers and other internal stakeholders to ensure that our clients can effectively manage compliance on an ongoing basis.
CFPB Compliance Monitoring and Enforcement
Beyond initial CFPB compliance program development and implementation, we also assist our clients with compliance monitoring and enforcement. To effectively mitigate their risk, regulated entities must proactively identify any compliance shortcomings, and they must address any issues before they cause undue harm to consumers. Appropriate internal enforcement is crucial as well, as effective enforcement can serve as both a positive reinforcer and a deterrent, and as the CFPB expects to see that regulated entities are taking adequate steps to prevent systemic compliance failures.
Internal CFPB Compliance Audits
Internal auditing is another key tool for managing CFPB compliance. We conduct both regularly scheduled and ad hoc internal CFPB compliance audits for our clients. If desired, we can structure these as “mock CFPB audits,” taking an approach similar to that taken by the CFPB during its external examinations of regulated entities.
The purposes of conducting internal CFPB compliance audits are twofold. The first, and most straightforward, purpose is to assess the efficacy of our client’s ongoing compliance efforts. If an internal audit reveals any compliance program deficiencies or employee-specific compliance failures, we work with our client to remedy the relevant issue (or issues) as efficiently as possible. The second purpose is to document our clients’ ongoing good-faith efforts to maintain compliance. When the CFPB conducts an examination or investigation, it expects to see documentation not only of the targeted entity’s compliance program, but also its continuing efforts to ensure that its compliance program is effective.
External CFPB Audit, Examination, and Investigation Defense Preparedness
As part of our CFPB compliance services, we also assist our clients with external CFPB audit, examination, and investigation defense preparedness. This involves generating and storing ongoing documentation of compliance as discussed above, as well as establishing protocols for responding to CFPB inquiries. For example, many entities first learn that they are facing scrutiny when they receive a CFPB civil investigative demand (CID). We help our clients prepare for this eventuality, and we provide their leadership teams and in-house legal departments with the information and resources they need to respond appropriately.
In addition to our CFPB compliance services, we also provide CFPB defense representation. Various issues can lead to CFPB scrutiny—even for entities that are fully meeting their compliance obligations. When you engage our firm as CFPB compliance counsel, we will be fully prepared to defend your financial institution or business as necessary, whether in a CFPB audit, investigation, or administrative or civil enforcement proceeding.
FAQs: Avoiding Issues Through Effective and Comprehensive CFPB Compliance
What Federal Laws Does the CFPB Enforce?
The CFPB enforces several federal laws and regulations that are focused on protecting consumers in the financing market. These include laws and regulations that address everything from privacy and data security to consumer disclosures and asset valuations. Some examples include:
- Equal Credit Opportunity Act (ECOA)
- Fair Credit Reporting Act (CFRA)
- Fair Debt Collection Practices Act (FDCPA)
- Real Estate Settlement Procedures Act (RESPA)
- Truth in Lending Act (TILA)
This list is by no means exhaustive. To manage CFPB compliance effectively, regulated entities must work with their counsel to ensure that they have a comprehensive understanding of all of the laws and regulations that apply.
How Can I Determine If My Bank or Business is CFPB Compliant?
Assessing CFPB compliance involves conducting an internal compliance audit. This is a multi-step process that requires a comprehensive understanding of the bank’s or business’s compliance obligations, operations, and all pertinent data sources. To ensure that any adverse findings are protected under the attorney-client privilege, it is important that banks and businesses conduct these internal compliance audits under the oversight of outside counsel.
How Does the CFPB Enforce Compliance?
The CFPB enforces compliance through various means. It routinely conducts audits, examinations, and investigations, and these inquiries can lead to either administrative or civil enforcement proceedings.
What Are the Risks of CFPB Non-Compliance?
CFPB enforcement proceedings carry significant risks for banks and businesses of all sizes (as well as their owners and executives). While fines and restitution are most likely, entities targeted for non-compliance can also face injunctions and bars from the consumer financing industry in some cases.
What Should I Do if My Bank or Business Is Not CFPB Compliant?
If you are concerned that your bank or business is not CFPB compliant, you should consult with experienced outside counsel promptly. Your bank or business will need to take appropriate steps to come into compliance as soon as possible, and you will need to work with outside counsel to determine how best to address any outstanding liability exposure.
Schedule a Complimentary CFPB Compliance Consultation at Oberheiden P.C.
If you would like more information about our CFPB compliance services, we invite you to get in touch. To schedule a complimentary consultation at your convenience, please call 888-680-1745 or tell us how we can help online today.