CFPB Cuts Supervisory Exams by Half and Refocuses Enforcement on Mortgage Fraud

The Consumer Financial Protection Bureau has set out an overhaul of its supervisory and enforcement priorities in an internal memo from Chief Legal Officer Mark Paoletta, including a plan to reduce the total number of supervisory 'events' it conducts by 50%. The memo said supervision should focus on conciliation, correction and remediation of harms subject to consumer complaints, and it outlined a concurrent reorientation of its supervisory activity away from non-bank financial firms and back toward depository institutions.

The CFPB said its objective was to return the share of its supervisory workload devoted to depository institutions to approximately 70% of total examinations — a proportion consistent with the bureau's posture in 2012.

ENFORCEMENT PRIORITIES

Alongside the supervisory rebalancing, the CFPB articulated revised enforcement priorities that concentrate its investigative and legal resources on cases involving actual fraud against identifiable victims rather than technical or procedural violations. The memo named mortgages as the highest priority, followed by Fair Credit Reporting Act and Regulation V data-furnishing violations, Fair Debt Collection Practices Act and Regulation F violations relating to consumer contracts and debts, fraudulent overcharges and fees, and inadequate controls to protect consumer information that result in actual losses.