The Consumer Financial Protection Bureau effectively becomes the federal government's one-stop shop for all things consumer protection. The Secretary of the Treasury designated July 21, 2011, as the date for the transfer of functions to the Consumer Financial Protection Bureau from several existing agencies, including:
- The Federal Deposit Insurance Corp.
- The Federal Trade Commission
- The National Credit Union Administration
- The Office of the Comptroller of the Currency
- The Office of Thrift Supervision
- The Department of Housing and Urban Development
"If you took the broad mandates of those agencies and you looked at them from end to end, the creation of [the CFPB] hasn't introduced any net new functional requirements or reporting requirements, with the exception of an Office of Financial Research," says Sean Culbert, co-lead of Capco's finance, risk and compliance practice.
With that in mind, banks should have an idea of what the CFPB might require them to report, as one of the bureau's goals is to take the broad -- and sometimes overlapping -- reporting and monitoring requirements from those agencies and unify the process under one banner, according to Culbert.
For banks that means getting enterprise data in order so as to be able to present one version of the truth when it comes to reporting to the CFPB and its Office of Financial Research. "From a process perspective, this needs harmonization or rationalization of what exists because of what was a highly fragmented regulatory structure," Culbert says.
It all comes down to reducing risk, he adds. "The politicians have taken over the regulatory community. No one's arguing that," Culbert comments. "The regulators that will win at this game are the ones that can actually prove they've lowered risk," he continues. "They're going from a rules-based to a principles-based regulatory environment. As for the timing and approaches toward implementation, it comes down to the question of, 'Are we reducing risk?' "