May 22 - The Conference of State Bank Supervisors and the Consumer Financial Protection Bureau have signed a supervisory coordination framework at the CSBS State-Federal Supervisory Forum in Nashville.
The framework builds on the 2011 information-sharing memorandum of understanding between the CFPB, CSBS, and various state financial regulatory agencies and regulatory associations. The 2011 MOU, which was the first such agreement the CFPB entered into, established an agreement for coordination and information sharing in supervision and enforcement work. To date, 59 state agencies across the nation have signed the 2011 MOU.
“After the Dodd-Frank Act created the CFPB as a new federal counterpart in the non-depository arena, the states quickly moved to establish a foundation of state and federal coordination for supervision of providers of consumer financial products,” said Charles Vice, newly appointed chairman of CSBS and commissioner of the Kentucky Department of Financial Institutions. “This enhanced framework will ensure that state and federal regulators can work together to provide more efficient supervision, reduce burden for the industry, and improve consumer protection.”
Although the 2011 MOU established an agreement for coordination among state regulators and the CFPB, the new framework establishes the process for how state and federal regulators will share supervision of non-depository financial services providers and covered depository institutions with more than $10 billion in assets.
Similar to the 1996 Nationwide State/Federal Supervisory Agreement, which established enhanced cooperative supervision between the states and the FDIC and the Federal Reserve, this framework should provide for seamless and pragmatic supervision of those providers regulated jointly by the states and the CFPB. The framework is intended to implement a flexible, dynamic process to achieve examination efficiencies and to avoid duplication of time and resources.
“CFPB’s jurisdiction spans an array of industries that fall outside of the jurisdiction of CSBS members,” said John W. Ryan, president and CEO of CSBS. “However, there is a spirit of cooperation among these state regulatory agencies to ensure coordination with the CFPB. We look forward to facilitating that cooperation among state regulators.”
The CSBS-CFPB framework is available here.