More Federal - State Coordination: CFPB and State Regulators to Coordinate and Cooperate on the Supervision of Providers of Consumer Financial Service

State attorneys general are not the only recipients of cooperation and coordination with the new Consumer Financial Protection Bureau – state banking regulators have also won in this regard. The Treasury Department announced yesterday that the Consumer Financial Protection Bureau and the Conference of State Bank Supervisors signed a memorandum of understanding to establish a base of coordination and cooperation for the supervision of consumer financial services and products providers. The Department stated that this step “will promote consistent examination procedures” and “effective enforcement” of consumer financial protection laws. The Department also stated that cooperation and coordination between the CFPB and the state banking regulators will increase efficiency in supervisory resources. The Department further stated that the state regulators and the CFPB will consult each other in the procedures and practices each uses in examinations and investigations of consumer financial product providers and service providers.

Consumer finance service and product providers should take further heed – state regulators, state attorneys general, and the CFPB will be working in concert to root out any perceived violations. The CFPB has broad rulemaking authority and the authority to address violations of federal law. Some States incorporate certain federal rules into their respective state statutes and regulations. Assuming that the CFPB and States seek to understand one another, work well together and that the coordination and cooperation is effective, consumer financial service and product providers are likely to experience an increased level of investigation and enforcement.