The Consumer Financial Protection Bureau (CFPB) and the Conference of State Bank Supervisors (CSBS) on Tuesday signed a memorandum of understanding (MOU) pledging to coordinate and cooperate in the supervision of providers of consumer financial products and services.
In a release announcing the MOU, state regulators and the CFPB, which is housed within the Department of Treasury, “will promote consistent examination procedures and effective enforcement of state and federal consumer laws and to minimize regulatory burden and efficiently deploy supervisory resources.”
The MOU, the release continues, “provides that state regulators and the CFPB will consult each other regarding the standards, procedures, and practices used by state regulators and the CFPB to conduct compliance examinations of providers of consumer financial products and services, including non-depository mortgage lenders, mortgage servicers, private student lenders, and payday lenders.”
Elizabeth Warren (left), the CFPB’s chief architect, said in a statement that the new consumer financial agency and the state banking regulators “are forging an alliance to protect American families. This agreement allows us to bring thousands of financial service providers out of the shadows and to begin the process of ensuring that all lenders comply with the same basic rules.”
Thomas Gronstal, chairman of CSBS, said in the same statement that the “formalized coordination between the states and the federal government established by the MOU will do much to create a comprehensive and seamless system of financial supervision and is a step toward a more cooperative system of supervision, which will benefit consumers and financial services providers alike.”