Last week, the CFPB’s Ombudsman’s Office issued its third annual report covering the Office’s activities during fiscal year 2014 (October 1, 2013 through September 30, 2014).  The role of the Ombudsman’s Office is to assist in the resolution of individual and systemic issues that a depository entity, non-depository entity or consumer has with the CFPB.

A new section of the annual report entitled “The Ombudsman in Practice” lists issues the Ombudsman heard in FY 2014 from consumer and trade groups and individual inquiries and raised with the CFPB as part of its regular internal meetings with various CFPB offices and divisions.  Those issues included:

  • A need for more clarity on CFPB points of contact for industry and an understanding of how CFPB staff learns of industry developments
  •  A desire for more clarity on regulatory compliance for business planning and operations
  • Concern about broad examination information requests
  • Differences in language between consent orders and corresponding CFPB press releases (which the Ombudsman undertakes to independently review in FY 2015).  This is something we have questioned in the past.

Among the issues raised with the Ombudsman by industry in individual inquiries were:

  • A need for understanding the intersection between the supervision and enforcement processes, such as how the two work together and what to expect or not to expect
  • Not knowing where to obtain regulatory interpretations
  • Unanticipated outcomes from regulations

The report includes a section entitled “Perspectives on Industry: How the CFPB Learns about Developments in Industry” that focuses on the steps taken by the Ombudsman to address industry’s concerns about this issue noted above.  The report discusses the Ombudsman’s review of how information is shared with and within the CFPB and CFPB initiatives “that may address some of the issues highlighted to the Ombudsman by industry.”  One such initiative noted by the Ombudsman is that the CFPB “has routine cross-Bureau product meetings and coordinates meetings with industry that bring in representatives from offices across the agency.”  In an attempt to provide “helpful” information to companies and trade groups “who do not always know who to contact” at the CFPB, the report contains a list of “CFPB connection points.” (Except for discussing the issue addressed in this section and stating that the Ombudsman intends to review differences in consent order and press release language, the report does not indicate how the Ombudsman plans to address the other issues noted in the bullet points above.)

In the section of the report dealing with the Ombudsman’s review of systemic issues, the Ombudsman updates several issues raised in previous annual reports.  Among such issues were how the CFPB shares information about its activities, events and services, and financial entities’ experiences with the examination process.

With regard to information sharing, the report indicates that the CFPB is engaged in a project to “refresh” its website that will include the addition of a digest to all website updates, creation of a single location  for users to subscribe to all available CFPB online “sign-ups,” creation of an aggregated place on the CFPB’s website for CFPB events, and the addition of instructions on how to request a CFPB speaker.

With regard to the examination process, the Ombudsman claims that the CFPB’s Division of Supervision, Enforcement, and Fair Lending (SEFL) adopted all of the recommendations made in the Ombudsman’s FY 2013 annual report to address concerns involving how a financial entity can elevate concerns about an examination and what can be expected during the examination lifecycle.  As a result, “the Ombudsman now views the FY 2013 recommendations on this topic as closed.”

The report sets forth the Ombudsman’s understanding that “the cover letter accompanying the initial information request now includes: the contact information for the examination team through the Regional Director; information about contacting the EIC to address questions or concerns about data format, data scope, or follow-up information requests; a link to the examination manual; and information on what to expect at the end of the examination.”  The report also indicates that the SEFL “shared a new policy for examiners to contact the financial entity no less than once each month after the onsite portion of the examination” and “to ensure that the appeals bulletin is readily accessible, the Ombudsman understands that the appeals bulletin will be co-located with the examination manual” on the CFPB’ website.

Among the Ombudsman’s FY 2015 plans is the launch of a new focus group program “to provide another forum for consumer, trade, and other groups to share feedback.”