The Consumer Financial Protection Bureau (CFPB) implementation team currently housed within the U.S. Department of the Treasury and the Conference of State Bank Supervisors (CSBS) has signed a memorandum of understanding (MOU) to establish a foundation of state and federal coordination and cooperation for supervision of providers of consumer financial products and services, including mortgage lenders.
Specifically, state regulators and the CFPB will endeavor to promote consistent examination procedures and effective enforcement of state and federal consumer laws and to minimize regulatory burden and efficiently deploy supervisory resources. Further, the MOU provides that state regulators and the CFPB will consult each other regarding the standards, procedures, and practices used by state regulators and the CFPB to conduct compliance examinations of providers of consumer financial products and services, including non-depository mortgage lenders, mortgage servicers, private student lenders, and payday lenders.
The consumer financial protection regime established by the Dodd-Frank Wall Street Reform and Consumer Protection Act strikes a constructive balance between federal and state regulation of firms offering many of the financial products families rely on every day. This MOU is an important step in implementing this balance and provides a starting point for additional state agreements as the states and the CFPB work to fulfill their mandates.
"Today is an important day for financial supervision," said Thomas Gronstal, chairman of CSBS. "The formalized coordination between the states and the federal government established by the MOU will do much to create a comprehensive and seamless system of financial supervision and is a step toward a more cooperative system of supervision, which will benefit consumers and financial services providers alike."
For more information, visit www.treasury.gov.