CFPB Releases Supervision and Examination Manual


The Consumer Financial Protection Bureau (CFPB) recently released a Supervision and Examination Manual – Version 1.0. The manual is a guide to how the CFPB will supervise and examine consumer financial service providers it regulates for compliance with federal laws, including the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA).

While auto dealers are exempt from the CFPB’s jurisdiction, the CFPB does have jurisdiction over auto financing companies. Therefore any requirements or restrictions placed on auto finance companies may very well affect auto dealers too. The manual incorporates examination procedures developed with the support of the Federal Financial Institutions Examination Council (FFIEC) for laws generally enforced by the CFPB. The procedures in the manual are designed to be used by the CFPB to inspect supervised entities that offer similar types of consumer financial products or services, or conduct similar activities. The manual also includes examination procedures organized by product and line of business.

The manual is divided into three parts. The first part describes the supervision and examination process. The second part contains examination procedures, including both general instructions and procedures for determining compliance with specific regulations. The third part presents general, generic templates for documenting information about supervised entities and the examination process, including examination reports.

The second part of the manual is the most extensive and specific portion of the guide. This part of the manual states the CFPB expects every regulated entity under its supervision to have an effective compliance management system adapted to its business strategy and operations. This part of the manual also discusses the common elements of an effective consumer compliance management system: board of directors and management oversight, the compliance program, response to consumer complaints, and audit coverage of compliance measures.

The second part of the manual also provides an overview of financial laws and regulations governing supervised entities and lists examination procedures related to compliance with each financial regulation. The examination procedures include objectives and procedures the CFPB will use to determine whether the entity is complying with the federal law and whether the entity has adequate policies and procedures in place to comply with those laws.

Mark is a shareholder with the firm and concentrates his practice in the representation of new and independent used dealerships.

Bill is a partner with the firm and concentrates his practice on commercial litigation, collections, and creditors’ rights.