CFPB Failed to Ensure Compliance With Enforcement Actions: IG

The CFPB has done a poor job of following up on enforcement actions to ensure compliance by financial institutions, the agency’s Inspector General said in a report released Thursday.

“As a result, potential compliance issues may linger or remain unresolved, possibly resulting in consumer harm,” the IG said.

In addition, the IG reported the agency’s website failed to describe the status of enforcement actions and the information presented could easily have been misinterpreted.

Before August 2017, the CFPB used a decentralized approach for monitoring compliance with final orders. Enforcement attorneys were responsible for monitoring compliance under that approach.

Also, in August 2017, the agency created a compliance team to centralize enforcement.

However, the IG said, the compliance team has been unable to complete its work within established time frames.

Employees told the IG that the compliance team was unable to fill an investigator’s position because of a hiring freeze.

When Office of Management and Budget Director Mick Mulvaney took over as acting director of the CFPB in late 2017, he instituted a hiring freeze.

However, the IG said, in June 2019, the director approved the hiring of a full-time investigator. By then, Kathy Kraninger had been confirmed as the permanent agency director.

In a response to the IG report, agency officials said the compliance team now has three full-time employees and that the agency would assess its work to determine if it is properly staffed.

The agency also agreed to make the necessary change to its website.