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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)

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

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

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

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

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

Information Interchange

• Independent ROE Delivery– CFPB to States: Certification and Authorization– States to CFPB: In development

• Enforcement Notices• Non-Coordinated Examination Requests

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.

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

Questions

Edwin Chow – Edwin.chow@cfpb.org

Terance Fancy – Terance.G.Fancy@maine.gov

Chuck Cross – ccross@csbs.org