While all eyes were on the recess appointment of its first director Wednesday, the Consumer Financial Protection Bureau quietly released guidance that directs supervised banks to turn over any and all information it requests.
The bureau said supervised institutions — banks with more than $10 billion in assets, and in the near future, certain nonbanks — may not selectively withhold documents based on their judgment that the materials "are not necessary to the bureau's execution of its responsibilities or that other materials would be sufficient to suit the bureau's needs."
"The supervisory process is based on the supervisor's full and unfettered access to information, and the supervisor is entitled — indeed, duty bound — to ensure that it thoroughly understands the institution in question and has access to all information that, in its independent judgment, may bear on its supervisory responsibilities," the bulletin said. "Failure to provide information required by the bureau is a violation of law for which the bureau will pursue all available remedies."
The industry, however, has said the CFPB's jurisdiction only extends to consumer financial laws. As such, it may only collect information, documents and other materials that relate to consumer financial products and servicers, they said.
"It has a defined jurisdiction, which is consumer retail transactions, and that is not the same thing as safety and soundness examination," said Oliver Ireland, a partner with Morrison & Foerster. "I think there's a real question as to what they can look at and how far their examination authority goes within the organization."
