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Yes, the CFPB is Serious About Self-Reporting!

If your organization might have violated a consumer financial protection law, should it disclose that potential violation to the Consumer Financial Protection  Bureau? It seems that at least one CFPB insider believes that the potential violation should be self-reported.© olly - Fotolia.com

At today’s meeting of the Consumer Financial Services Committee in San Francisco, Peggy Twohig,  CFPB Assistant Director, Office of Supervision Policy, offered a few remarks on whether a covered entity should self-report conduct where the law is not clear on whether the conduct violates consumer financial protection law. In concluding that an entity should self-report even these “grey issues,” Twohig noted that covered entities should consider that the CFPB may discover the issue in a exam.  If the covered entity first self-reported the issue, it would allow for “a dialog” and engagement on what the appropriate result should be.

Twohig noted that self-reporting by US Bank weighed heavily in the CFPB’s decision to forgo imposing civil penalties against the institution for violating consumer financial services laws.

Twohig’s analysis offers a peek into the CFPB’s goals for self-reporting first laid out in its Bulletin 2013-06 titled Responsible Business Conduct: Self-Policing, Self-Reporting, Remediation and Cooperation. Clearly, if there is any question whether your entity should self-report, the CFPB believes it should err on the side of self-reporting.

Early this summer, Joann Needleman provided her analysis of the Bulletin, noting several “grey” areas within the Fair Debt Collection Practices Act and the challenges the Bulletin poses when deciding when to self-report. As Joann wrote, these grey areas are created by differing court rulings — what may be compliant in Jersey City, NJ, for example, would be non-compliant two miles away in Manhattan.

When building and executing a Compliance Management System, entities subject to the FDCPA should consider whether self-reporting should include its decision to adopt an operational model compliant with one set of case law, but non-compliant under another line of cases. Self-reporting may avoid, in the worst case, civil penalties, should the CFPB determine the conduct does violate a consumer financial protection law, despite court decisions finding the conduct compliant.

What do you think?




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Donald Maurice provides counsel to the financial services industry, successfully litigating matters in the state and federal courts in individual and class actions. He has successfully argued before the Third, Fourth and Eighth Circuit U.S. Courts of Appeals, and has represented the financial services industry before several courts including as counsel for amicus curiae before the United States Supreme Court. He counsels clients in regulatory actions before the CFPB, and other federal and state regulators and in the development and testing of debt collection compliance systems. Don is peer-rated AV by Martindale-Hubbell, the worldwide guide to lawyers. In addition to being a frequent speaker and author on consumer financial services law, he serves as outside counsel to RMA International, on the governing Board of Regents of the American College of Consumer Financial Services Lawyers and on the Governing Committee of the Conference on Consumer Finance Law. From 2014 to 2017, he chaired the ABA's Bankruptcy and Debt Collection Subcommittee.