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CFPB’s Ombudsman’s Office issues first annual report

Posted in CFPB Enforcement, CFPB General

Last December, the CFPB opened an Ombudsman’s Office to assist in the resolution of individual and systemic issues that a depository entity, non-depository entity or consumer has with the CFPB.  The Ombudsman Office has now issued its first annual report for fiscal year 2012.   The report indicates that, during FY 2012, the Ombudsman provided “informal feedback [on many topics] in regular meetings with Bureau leaders and in meetings requested by Bureau divisions, offices, or the Ombudsman.”  Most of the report deals with the Ombudsman’s review of individual inquiries and systemic issues. 

Of primary significance to industry is the report’s identification of  “the presence of enforcement attorneys at supervisory exams” as one of two systemic issues reviewed by the Ombudsman in FY 2012.  Last February, in a Q&A following a teleconference at which Wendy Kamenshine, the Ombudsman, was a speaker, we raised concerns about the CFPB’s policy to include enforcement attorneys in examinations and information-gathering meetings with a supervised entity’s representatives.  In particular, we described the policy’s chilling effect on the attorney-client relationship resulting from the fear that enforcement attorneys will have access to attorney-client communications.  At that time, Ms. Kamenshine indicated that she would share our concerns with others in the CFPB. 

According to the report, the Ombudsman considered all perspectives on the CFPB’s policy “by meeting individually with CFPB leaders and staff, as well as bank officials, outside attorneys, and consultants.”  The report also states that ”[t]he Ombudsman met with some groups representing providers of consumer financial products and services that do not work with banks, but did not hear about this issue from individual financial institutions that are not banks.”  As a result of those meetings,  the Ombudsman “recently recommended that the CFPB review implementation of the policy to have enforcement attorneys present at supervisory examinations.”   The Ombudsman also recommended that until that review is complete, “the CFPB establish ways to clarify the Enforcement Attorney role in practice at the supervisory examination.”  Unfortunately, nothing in the report suggests that the Ombudsman’s involvement is likely to result in a change to the CFPB’s policy, with the report stating only that the Ombudsman “understands that the CFPB now is considering these recent recommendations.” 

The section of the report on individual inquiries states that during FY 2012, the Ombudsman received 775 individual inquiries, with over 80% of those inquiries coming from consumers raising “questions or issues regarding the processes, services, products or entities under the CFPB’s jurisdiction.”  Because about 40% of the 1,003 issues  raised in the individual inquiries “reflected a need for further understanding of the CFPB’s consumer complaint process,”  the other systemic issue reviewed by the CFPB was “what consumers understand about the consumer complaint process.”  The report describes various recommendations made by the Ombudsman to improve consumer understanding of the complaint process, including adding information to the letter a consumer receives at the close of a complaint  investigation and providing consumers without computer access additional notifications by mail and a longer period to dispute a company’s response.