Because the Director of the CFPB has not yet been appointed and confirmed, some of the authority that was delegated to the CFPB under the Dodd-Frank Act cannot yet be invoked. The Inspector General of the Department of the Treasury and the Federal Reserve Board issued a joint letter on January 10, 2011, regarding CFPB authority with and without a Director in place. Without a Senate-confirmed Director by the designated Transfer Date, the two agencies concluded that section 1066(a) of the Dodd-Frank Act grants the Secretary of the Treasury the authority to carry out the functions of the Bureau found under subtitle F of title X. On the designated Transfer Date, subtitle F grants the Bureau the authority to: (1) prescribe rules, issue orders, and produce guidance related to the federal consumer financial laws that were, prior to the designated Transfer Date, within the authority of the FRB, OCC, OTS, FDIC, and NCUA; (2) conduct examinations (for federal consumer financial law purposes) of banks, savings associations, and credit unions with total assets in excess of $10 billion, and any affiliates thereof; (3) prescribe rules, issue guidelines, and conduct a study or issue a report (with certain limitations) under the enumerated consumer laws that were previously within the authority of the FTC prior to the designated Transfer Date; (4) conduct all consumer protection functions relating to the Real Estate Settlement Procedures Act of 1974, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, and the Interstate Land Sales Full Disclosure Act that were previously within the authority of HUD prior to the designated Transfer Date; (5) enforce all orders, resolutions, determinations, agreements, and rulings that have been issued, prior to the designated Transfer Date, by any transferor agency or by a court of competent jurisdiction, in the performance of consumer financial protection functions that are transferred to the Bureau, with respect to a bank, savings association, or credit union with total assets in excess of $10 billion, and any affiliates thereof; and (6) replace the FRB, OCC, OTS, FDIC, NCUA, and HUD in any lawsuit or proceeding that was commenced by or against one of the transferor agencies prior to the designated Transfer Date, with respect to a consumer financial protection function transferred to the Bureau.
The Treasury Secretary is not permitted to perform certain newly established Bureau authorities if there is no confirmed Director by the designated Transfer Date. Accordingly, without a Senate-confirmed Director, the Treasury is not permitted to exercise the Bureau’s authority to: (1) prohibit unfair, deceptive, or abusive acts or practices under subtitle C in connection with consumer financial products and services; (2) prescribe rules and require model disclosure forms under subtitle C to ensure that the features of a consumer financial product or service are fairly, accurately, and effectively disclosed, both initially and over the term of the product or service; (3) prescribe rules under section 1022 relating to, among other things, the filing of limited reports to the Bureau for the purpose of determining whether a nondepository institution should be supervised by the Bureau; and (4) supervise nondepository institutions under section 1024, including the authority to (a) prescribe rules defining the scope of nondepository institutions subject to the Bureau’s supervision, (b) prescribe rules establishing record-keeping requirements that the Bureau determines are needed to facilitate nondepository supervision, and (c) conduct examinations of nondepository institutions.
While there are some who do not agree with the Treasury’s analysis, there appears to be a consensus that the CFPB can perform all consumer financial protection functions of the FRB, OCC, OTS, FDIC, FTC, NCUA, and HUD in connection with issuing regulations under existing consumer financial protection laws. It cannot, however, carry out new functions provided to the CFPB under the Dodd-Frank Act, such as prohibiting unfair, deceptive, or abusive acts or practices in connection with consumer products and services; prescribing rules and requiring model disclosures to ensure that features of consumer financial products or services are fairly, accurately, and effectively disclosed; or supervising non-depository institutions.