Consumer Bureau lays out plan for monitoring banks

ADVERTISEMENT
Previously, bank regulations, as they pertain to consumers, were spread among various financial regulators. In addition to creating the CFPB, the Dodd-Frank financial reform housed that enforcement within the CFPB. Now, the bureau will be keeping an eye on the 111 banks that have over $10 billion in assets, which accounts for over 80 percent of the banking industry's assets.

The CFPB will monitor these banks by conducting periodic examinations for most banks. But the largest and most complex banks will be subject to a year-round supervision plan, customized to meet each bank's exact specifications.

The watchdog group will examine how banks develop, market, sell or manage consumer financial products; interview employees; review banks' internal procedures; and ensure banks are engaging in fair lending practices.

If a bank does not comply with consumer protection laws, the CFPB will seek "corrective actions," which ranges broadly from reimbursing customers or reworking promotional materials to assessing fines or telling banks to end certain practices.

The CFPB plans to post on its website the first version of the manual it will provide examiners and will be hosting roundtables with banks beginning in early August.