On February 16, 2024, the Consumer Financial Protection Bureau (CFPB) issued a procedural rule updating the process by which financial institutions can appeal supervisory findings. The updated rule broadens the CFPB officials eligible to evaluate appeals, the options for resolving an appeal, the matters subject to appeal, and makes additional clarifying changes. The CFPB’s first process for supervisory appeals was published on October 31, 2012 (Bureau Bulletin 2012–07) and revised in November 2015. The process was substantially modeled upon the practices of the prudential regulators.
After an examination or targeted review, if a supervised entity disagrees with a compliance rating or any underlying adverse findings set forth in the relevant examination report, or adverse findings set forth in a supervisory letter, the entity may use the appeals process. Adverse findings are those that result in a Matter Requiring Attention by the board of directors or principal(s) of the entity. In general, the CFPB encourages supervised entities to fully engage with examiners and regional management to discuss any proposed ratings and findings before the supervisory review is complete and, when disagreements occur, to present all available information to support this position. Via this dialogue, the CFPB anticipates that most disputes can be resolved before an examination is final.
To file an appeal, the supervised entity may submit a written appeal via email to: CFPB_Supervisoryappeals@cfpb.gov within 30 business days of the date of the email transmitting an appealable examination report containing a compliance rating, or an appealable supervisory letter.
Within five business days of receipt of an appeal, the Supervision Director will designate a committee composed of three CFPB managers who were not involved in the supervisory matter being appealed and who have relevant experience on the issue raised by the appeal. The General Counsel will designate legal counsel to advise the committee. The committee will review the written appeal and supporting documentation, solicit input from relevant CFPB personnel and the prudential regulator, and hear a presentation from the appealing entity if requested.
Following the review, the committee will advise the Supervision Director in drafting a written decision on the appeal that may uphold or rescind the finding. Alternatively, the decision may remand the finding to Supervision staff who will consider a modified finding. The decision will be transmitted to the appealing entity by email, copying appropriate internal parties and the prudential regulator or state regulator where appropriate. The CFPB expects that a decision will be issued within 60 business days from the assignment of the appeal to the committee, but the committee will notify the supervised entity by email if a longer period is needed.
The revised supervisory appeals process is applicable as of February 22, 2024, and applies to appeals pending with Supervision on the date it is published in the Federal Register.
Credit unions that are subject to an examination under the CFPB’s supervisory authority should update their policies and procedures to ensure that they are aware of the available options with respect to appeals of a compliance rating or adverse material finding by CFPB.
America’s Credit Unions President & CEO Jim Nussle will be meeting with CFPB Director Chopra this week to discuss credit union priorities. Also, if you haven’t already participated, please complete our Overdraft/NSF survey to provide America’s Credit Unions with the critical data we need to better inform policymakers. The deadline for the survey is February 29.