CFPB To Consider Scale of Violations When Making Enforcement Decisions: Mulvaney

The Bureau of Consumer Financial Protection will look at the scale of violations when considering enforcement actions, acting director Mick Mulvaney said during a speech in Washington, D.C., on Tuesday. A number of published reports have surfaced relating Mulvaney’s remarks, which indicate that the agency will look at how many violations, related to the total number of transactions in a given market.

“Twelve thousand out of 3.5 million [transactions] is not that many,” Mulvaney said in a hypothetical example, according to a published report. “And so the question then becomes, is this systematic, is it intentional? So we are going to start to look at that.”

The report noted that under former director Richard Cordray, the CFPB would announce the number of violations that had occurred when taking an enforcement action against a company, but would not announce “the overall size of the particular market.”

“Based upon the information that’s given to me, [the rate] was not relevant in the past, but I think it should be,” he explained. In one case, for example, a report highlighted 21,000 credit card complaints in 2016, a number that represented a 0.006 percent rate of complaints per open credit card account.

One astute observer noted that the CFPB is considering adopting a civil money penalty matrix, similar to the Office of the Comptroller of the Currency, which regulates national banks. The OCC’s matrix “includes an evaluation of ‘the relationship of the number of instances of conduct to the bank’s total activity.’ ”


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