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Vetting the Consumer Financial Protection Bureau

With a mandate to regulate banks in the name of the American public, Elizabeth Warren and the Consumer Financial Protection Bureau have some lofty goals.

For example, "If I turn around and tweet from my phone because I got annoyed by my bank, now you're looking at some information that means nothing," Ruckh says. "A bank annoyed me."

While it's unknown which monitoring tools the CFPB is using, the regulator already has shown signs that it's listening, posting (as of press time) eight response videos to various questions -- either explaining what the bureau is working on or its goals within a certain area, or simply where consumers can go to find more information.

But the bureau's job is only just getting started; in fact, it's still being defined. "At the end of the calendar year there were still 11 upcoming Dodd-Frank Act final rules that had not been issued yet, just in the consumer protection area alone," says J.H. Caldwell, a Charlotte, N.C.-based partner in Deloitte's regulatory and capital markets group.

Meanwhile, the Consumer Financial Protection Bureau already has one thing from banks, consultants and the general public alike: everyone's attention. "Everybody's waiting to see how they pull it off," LECG's Ruckh says of the CFPB's enormous mission. "It's going to be an interesting thing. Everything that Ms. Warren has announced on how she wants to do it, I think is some great stuff. I really want to see it executed."

While the CFPB continues to gather public input, and while the final rules under Dodd-Frank are established toward the end of protecting consumers, there still is time for banks to begin proactively addressing the potential changes ahead. As the CFPB addresses the challenge of sorting through the potentially massive amount of data coming in from consumers, there's an opportunity for banks to align with several best practices that, while not yet necessarily tied to written rules, could be the difference between an organization ready to react to new regulation and one that has to.

"You'll see banks that are reacting to this in a series of different ways," Deloitte's Caldwell says. "One of those reactions from banks is that they're willing to sit back and wait. I think that's setting themselves up for a little bit of a fire drill when those rules take place. Some banks are working to understand everything as it's coming out, developing strategy and moving forward. I think those organizations are going to find these activities easier."

It All Comes Back to Data

So where does the preparation begin? "It all comes down to data," LECG's Ruckh asserts, repeating the oft-heard mantra. "Always has, always will."

Regardless of any specific legislative demands, solving the data problem is nothing short of fundamental, experts agree.

"One could also offer that there's an element of irony in some of this, from the technology implementation side," notes Mat Small, a partner in New York-based Capco's technology practice in North America. "The work that people will need to do in order to affect [data] rationalization -- the single version of the truth -- that's not new."

But that doesn't mean preparing for whatever new rules the CFPB may enact lacks urgency. And, as Deloitte's Caldwell says, banks -- at least the smart ones -- are mobilizing teams to address regulation at an enterprise level right now.

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