Watchdog report says CFPB can ‘enhance’ enforcement investigation processes

The Office of the Inspector General (OIG) that overseeing both the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau (CFPB) released a report stating that the CFPB’s enforcement investigation processes can be enhanced, and it offers recommendations on how to accomplish this goal, according to a review of the report by HousingWire.

“We conducted this evaluation to assess the CFPB’s process for conducting enforcement investigations,” the report explained. “Specifically, we focused on the efficiency of CFPB Enforcement’s process for conducting enforcement investigations, including the timeline of the investigation process, and we reviewed Enforcement’s practices for tracking and monitoring matters.”

The investigation found deficiencies in certain reporting practices for the CFPB’s Office of Enforcement, according to the report.

“Specifically, the Office of Enforcement should track the timing expectations described in its internal guidance,” the report read. “Enforcement has not met its goal to file or settle 65 percent of its enforcement actions within two years of the investigation opening date in any of the five years since fiscal year 2017.”

While certain extenuating factors may have impacted the office’s ability to meet the two-year timeline, tracking timing expectations for “key steps” in the enforcement process could “help to identify inefficiencies and mitigate delays during enforcement investigations.”

The office should also take steps to improve its “matter management system,” which it uses to monitor the progress of its investigations.

“We found that Enforcement staff did not consistently document complete information in the system,” the report read. “We believe that providing training on the documentation requirements outlined in current guidance will help reinforce the requirements and better enable Enforcement to maintain accurate, complete, and uniform documents about investigations.”

The OIG submitted letters detailing its findings to Dave Ueijo, the CFPB’s acting associate director in the Division of Supervision, Enforcement and Fair Lending (SEFL), who served as the acting director of the CFPB in the early days of the Biden administration before the confirmation of Rohit Chopra.

In its letters, the OIG recommended the bureau “incorporate the timing expectations for key steps in the enforcement process established in [the office]’s internal guidance into the tracking and monitoring of matters,” and that the bureau “provide training to Enforcement staff to reinforce the current guidance on the document maintenance and retention requirements for the matter management system.”

In both instances, Uejio agreed with the recommendations, according to a summary of management responses.