In a statement recently disseminated to all Consumer Financial Protection Bureau (CFPB) personnel, Acting Director Dave Uejio set forth new priorities for the CFPB’s Supervision, Enforcement, and Fair Lending Division (SEFL), specifically around providing COVID-19 relief to consumers and racial equity.
In the statement, Uejio communicated his belief that “strong oversight” can make a “meaningful impact” on helping the country’s efforts to recover from the pandemic. Consistent with this, Uejio outlined two directives he has given to SEFL. First, to “always determine the full scope of issues found in its exams, systemically remediate all of those who are harmed, and change policies, procedures, and practices to address the root causes of harms.” Uejio indicated this change will extend to include active Prioritized Assessments. Second, for “SEFL to expedite enforcement investigations relating to COVID-19” in order to send a “message that violations of law during this time of need will not be tolerated.”
Based on a list of CFPB-identified compliance failures regarding COVID-19 consumer relief, regulated entities engaged in mortgage servicing, student loan servicing, credit reporting, and Paycheck Protection Program loan administration may soon find themselves subject to these heightened supervisory and enforcement activities.
Regarding racial equity, Uejio indicated that he will expand existing exams and add new ones to “have a healthy docket intended to address racial equity” and that fair lending enforcement will serve as “a top priority” at the CFPB. Furthermore, the CFPB will “look more broadly…to identify and root out unlawful conduct that disproportionately impacts communities of color and other vulnerable populations.”
Uejio also used the statement to announce that the CFPB will resume supervising lenders for compliance with the Military Lending Act (MLA). This reverses a 2018 decision by Acting Director Mick Mulvaney to cease supervisory MLA activities for lack of explicit statutory authority. This falls under a larger effort by Uejio to reverse “policies of the last administration that weakened enforcement and supervision.” In furtherance of this overarching policy change, Uejio stated that the CFPB plans to “rescind public statements conveying a relaxed approach to enforcement of the laws in our care.”
It’s clear that consumer financial service industries can expect a more proactive and assertive CFPB going forward. Regulated entities should act accordingly to ensure they are equally proactive in developing rigorous compliance management programs designed to identify and remediate potential areas of risk.