Read the Prepared Remarks from the CFPB Here

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Treliant Takeaway:

Treliant understands the pressure financial institutions are under regarding governance, risk management and consumer protection.  If your financial services company needs assistance with evaluating your practices, we can help.


CFPB Director Rohit Chopra speaking to the University of Pennsylvania Law School took the time to address institutions that have experienced repeated violations, more specifically large institutions that have a history of non-compliance with laws and regulations.  Chopra suggests that large institutions are not deterred by large fines but instead see them as a “part of doing business”.  This attitude, in his opinion, is partly due to the government’s historical “too big to jail” approach and this practice is not halting repeat offenders. Director Chopra specifically cited well-known large financial firms with multiple legal enforcement actions such as Citigroup, JPMorgan Chase, Wells Fargo and American Express. He also spoke of his opposition to the Facebook settlement while he was at the FTC, in that it would not result in any changes to the company’s business model or practices.

In his closing, Chopra recommended regulators “should be sharpening their focus on repeat offenders and discuss some of the non-monetary, structural remedies agencies might seek in order to levy the same kind of deterrents on small and big firms alike.”  He specifically stated the CFPB will:

  • establish dedicated units in the supervision and enforcement divisions to enhance the detection of repeat offenses and hold them accountable.
  • Look at remedies that are more structural in nature such as:
    • Caps on size or growth
    • Bans on certain types of business practices
    • Divestitures of certain product lines
    • Limitations on leverage or requirements to raise equity capital
    • Revocation of government-granted privileges such as FDIC insurance
    • Suspension of operations
    • Invoking individual liability such as disqualification, dismissal or lifetime occupation bans.

The stakes of having a strong governance and risk management system have never been more important than today.  Tolerance for repeated violations and weaknesses is waning.


Lorraine Faust

Lorraine Faust, a Senior Manager with Treliant, is a regulatory and compliance professional with over 25 years’ experience in the financial services industry. She has worked in small, mid-size, and large financial institutions in both internal audit and compliance. Knowledgeable in a wide range of consumer protection laws, Lorraine’s focus…