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Friday, June 28, 2013

CFPB Offers Four Favorable Factors in Enforcement Decisions

This week the Consumer Financial Protection Bureau issued a bulletin describing “responsible conduct” on a regulated institution’s part that the agency may “favorably consider in exercising its enforcement discretion.”

The factors are self-policing, self-reporting, remediation of harm and cooperation with the CFPB in investigations. Self-policing includes, for example, a “robust compliance management system.” The bureau puts “special emphasis” on self-reporting because it reduces the burden on CFPB resources. Remediation, the CFPB said, “may be viewed positively” even when a bank has identified only a potential violation, not an actual one. Cooperation, it said, is considered “substantial and material steps above and beyond what the law requires.”

“If a party meaningfully engages in these activities, which this bulletin refers to collectively as ‘responsible conduct,’ it may favorably affect the ultimate resolution of a Bureau enforcement investigation,” the CFPB said.

Read the bulletin.