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Coordinated Supervision
NACARA Denver, CO
Septmember 21, 2015
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Introductory Session
Panelist, Edwin Chow – CFPBPanelist, Terance Fancy – Maine
Panelist, Chuck Cross – CSBS
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TitleCoordinated Supervision Background
• 2011 Information Sharing MOU
• 2013 Supervisory Coordination Framework and State Governance Agreement
• 2014 Coordinated Exams begin
• 2015 Release of Coordinated Exam Guidance
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TitleFramework Responsibilities
• Coordinate Examination Schedules • Quarterly Update Meetings • Independent Examination Schedules• Designation of SPOC & EIC• Necessary Processes & Additional Protocols• Notices, Corrective Actions, and Information
Exchange
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Current SCCASSOCIATION REPRESENTATIVE
CSBS Charles A. Vice, KYAlbert Forkner, WY
NACCA Joe Mulberry, WYMike Larsen, ID
NACARA Carmine Costa, CTTerance Fancy, ME
MTRA Doug Buras, LARobin Lobb, KS
AARMR Cindy Begin, MARod Carnes, GA
NASCUS
Support Staff
Linda Jekel, WAMary Ellen O’Neil, CT
Chuck Cross, CSBSSabrina Bergen, NASCUS
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CFPB LeadershipREGION REPRESENTATIVE
West Edwin Chow – Regional Director and Lead RD for state coordination initiatives
Northeast Agnes Bundy Scanlan – Regional Director
Midwest Anthony Gibbs – Regional Director
Southeast James Carley – Regional Director
Headquarters David BleickenChris Young
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SCC
MMC
StateMortgageRegulators
MMET
StateMSB
Regulators
NACARA
StateDebt Collector
Regulators
NACCA
StatePayday
Regulators
CSBS
Hierarchy of Coordinated Supervision
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Examinee Selection Process
Examinees selected through iterative
process between the SCC & CFPB
Selection based on product lines, business volume, risk, consumer
complaints, previous exam results, etc
SCC and CFPB share list of potential examinees
SCC and CFPB discuss risk profile of
companies on each list
Examinees of common interest
identified
CFPB-SCC meeting to schedule coordinated
exams
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2014 Examination Schedule
Industries to be examined9 total
Mortgage Origination/Servicing (6 companies)Payday Lending (1 company)
Debt Collection (2 companies)
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2015 Examination Schedule
Industries to be examined11 total
Mortgage Origination/Servicing (5 companies)Money Transmitter (2 companies)
Payday Lending (1 company)Debt Collection (3 companies)
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2016 Examination Schedule
Industries to be examined15 total
Mortgage Origination/Servicing (7 companies)Money Transmitter (2 companies)
Payday Lending (2 companies)Debt Collection (2 companies)
Auto Finance (2 companies)
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State Examination Procedures
• Mortgage: MMC management and processes– Established and mature– ComplianceEase software for origination exams
• Debt Collection: NACARA– Processes in development– History of multi-state exams
• Payday Lending: NACCA– Newly developed procedures
• Money Transmitters: MMET– MMET/MTRA examination procedures
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Focus on State Coordinated Debt Collection Process
• NACARA developed procedures comprise the technical content, working templates, and report of exam of state examination procedures.
• Coordinated examination procedures govern the administration of the examination.
• NACARA establishes exam team and selects SPOC and EIC.• SPOC/EIC responsible for scoping exam and assigning duties
and coverage.• Information requests and exchange.• Shared meetings.• Findings and state report of exam.
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Coordinated Examination ProceduresRollout and Approval
• Released in June for beta testing as pilot by Coordinated Exam EICs/SPOCs
• Revisions as necessary in 2015
• Will go through final CFPB and SCC approval processes after pilot-testing during 2015
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Coordinated Examination Procedures
– General• Principles and protocols for communications and coordination• Supervisory Plan for examining each entity subject to coordinated
examination– Pre-Exam
• Examination scoping, planning, staffing, and information requests– Examination
• Meetings w/ company, information sharing, and exam coordination – Post-Exam
• CFPB and respective State Regulatory Authority approves findings, conclusions, and ratings
• Coordination on required corrective actions• Coordinated meetings with Boards and ownership• Follow-up and monitoring on required corrective actions
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Coordinated Exam Procedures• States continue to assess
compliance with state specific laws during exams and execute some of their own exam techniques; however, some states are using the procedures in the CFPB’s Supervision and Examination Manual
• You can become familiar with CFPB examination procedures by reviewing that manual
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Examination Reports/Supervisory Letters
• Currently, the State Regulatory Authority (SRA) and CFPB will issue separate reports
• SRA and CFPB will coordinate with one another to ensure findings regarding federal law are consistent between the reports
• Separate responses are required for the SRA and CFPB reports
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Information Interchange
• Independent ROE Delivery– CFPB to States: Certification and Authorization– States to CFPB: In development
• Enforcement Notices• Non-Coordinated Examination Requests
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CSBS is Currently Requesting ROEs on Independent Exams
• In order to fulfill the state obligation under the Framework CSBS is asking for specific ROEs
• Beginning with mortgage• Upload to MMC site for secure delivery• Other areas, including debt collection reports,
will begin soon.
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Annual Reports to State Regulators
The following are excellent sources of information regarding activities and accomplishments of the State Regulatory Authorities:• State Coordinating Committee• Multi-State Mortgage Committee• Multi-State MSB Examination Taskforce
All available on the CSBS website
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Questions
Edwin Chow – [email protected]
Terance Fancy – [email protected]
Chuck Cross – [email protected]