CFPB Has Investigated Financial Institutions Outside Its Jurisdiction: IG

The CFPB has begun examinations of financial services providers, only to discover that the businesses are not regulated by the agency, the bureau’s Inspector General said, in a report issued Thursday.

The IG said that the agency “has inadvertently scheduled examinations at institutions that are outside its supervisory jurisdiction because it did not have sufficient information about those institutions.”

The report covers examinations that occurred in 2017 and 2018, although the Inspector General said it has received anecdotal evidence that similar problems were noted in the past.

In addition, the IG said, the CFPB’s regional offices sometimes has planned examinations, only to cancel them because the institution was outside the CFPB’s region.

The report said that under the Dodd-Frank Act, the bureau had the authority to supervise 170 depository institutions and possibly thousands of non-depository companies. Many of the institutions offer more than one product line that is subject to the bureau’s supervisory authority.

In contrast to the four federal prudential regulators, which focus on safety and soundness issues, the CFPB focuses on consumer protections, the IG said.

The IG said that in some instances, the CFPB only discovered that they did not have supervisory powers over an institution when the institution completed a pre-examination questionnaire.

And, the IG said that regional employees reported that their opinions about which institutions should be examined were not always taken into account.

In a letter in response to the report, the CFPB said it has agreed to take corrective action to solve the problems cited by the IG.