The Consumer Financial Protection Bureau is reorganizing its supervision and enforcement units which could lead to less scrutiny of smaller companies in the financial services industry, including debt collectors, according to a published report.
The reorganization is an attempt to eliminate the “arguing” that goes on in the Bureau’s Office of Supervision, Enforcement, and Fair Lending over which institutions to examine and investigate, said Bryan Schneider, the CFPB’s associate director of supervision, in a memo that was circulated within the Bureau last week, according to a published report. The decision to restructure was made after seven months of work with staff in the SEFL office, who cited communication problems between the supervision and enforcement units. The restructuring will take six months to complete.
Under the new structure, final decisions on supervision and enforcement matters will be made by a team that had previously dealt only with supervision policy, called the Office of Supervision Policy. It will now be called the Office of SEFL Policy and Strategy. That unit will be run by Peggy Twohig, the Bureau’s assistant director for supervision policy. She will have to sign off on any enforcement investigations undertaken by the unit. A separate unit that coordinates exam schedules, called the Office of Supervision Examinations, will be renamed the Office of Supervision.
The reorganization is going to take “significant power” away from the enforcement unit because they will now be required to obtain approval from someone outside of their department before opening investigations.
Sen. Sherrod Brown [D-Ohio], the ranking member of the Senate Banking Committee, blasted the decision in a letter that was sent to CFPB Director Kathleen Kraninger, especially because it is unclear if she will remain in the job after the upcoming presidential election. The reorganization “will weaken the Bureau’s ability to protect consumers from exploitation, abuse, and discrimination in the marketplace,” Sen. Brown wrote. “If you insist on going down this ill-advised path, you should at least not move forward with the SEFL reorganization until it is clear that you will continue as Director.”
