The Consumer Financial Protection Bureau on Friday announced it had issued a rule updating the process by which companies can appeal supervisory findings uncovered during examinations. The changes are intended to reflect updates to the Bureau’s organizational structure and to remain in line with the processes recently put into place by other banking regulators.
The Background: After a company is examined by a CFPB examiner, the company has the opportunity to appeal the examiner’s findings, if it disagrees with the compliance rating or any of the adverse findings.
The Changes: Among the changes included in the rule issued by the CFPB are:
- The Supervision Director will select an appeals committee of three CFPB managers with relevant expertise who did not work on the matter being appealed, and who will advise the Supervision Director in conjunction with attorneys assigned by the CFPB’s General Counsel.
- The appeals committee will now be able to remand a matter to Supervision staff for consideration of a modified finding, in addition to the existing options of upholding or rescinding the finding.
- Institutions may now file an appeal of any compliance rating or finding, not only an adverse rating.
What Can’t Be Appealed: The CFPB also laid out a series of situations under which the appeal process may not be used. Those include:
- Preliminary supervisory matters (including preliminary findings)
- CFPB examiners’ decisions to initiate supervisory measures, such as memoranda of understanding
- Enforcement-related actions and decisions, including cease-and-desist orders and determinations to proceed with an investigation or public enforcement action
- Adverse findings or an unsatisfactory rating contained in a supervisory letter or examination report related6 to a recommended or pending investigation or public enforcement action
- Referrals of information to other law enforcement and regulatory agencies.
