Reuters: Regulatory News: U.S. consumer cop says not bullying banks

Reuters: Regulatory News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

U.S. consumer cop says not bullying banks Mar 29th 2012, 20:49 By Dave Clarke WASHINGTON, March 29 | Thu Mar 29, 2012 4:49pm EDT WASHINGTON, March 29 (Reuters) - The head of the new U.S. financial protection agency is fending off criticism that the presence of enforcement staff during routine inspection visits to banks is an intimidation technique. Banks and their lobbyists have complained that, when the Consumer Financial Protection Bureau staff tasked with regularly supervising lenders show up at their offices, they are bringing with them the agency lawyers charged with dishing out punishment when rules and laws are broken. "This practice feeds the institutional fear that the CFPB's main purpose or object during an exam is to obtain documents and information that later can be used to launch an enforcement action," Republican Representative James Renacci said at a House Financial Services Committee hearing on Thursday. Renacci said the banking industry has voiced concerns to him. Industry officials have said that supervisors from other banking regulators do not often show up with the enforcement staff and wondered if intimidation is the goal. "Sort of like showing up to a Sunday school picnic with a 12 gauge shotgun," Steve Bartlett, head of lobbying group The Financial Services Roundtable said at a U.S. Chamber of Commerce event earlier this week. On Thursday Richard Cordray, director of the bureau, said the banking industry and concerned lawmakers should relax. "It's not an attempt to create some sort of macho message that we're sending," he told a House Financial Services Committee hearing. "People shouldn't read any message into that and none is intended." Cordray said he has explained to bank CEOs that the supervisory and enforcement staffs are simply trying to get a better idea of how the other operates as the bureau, which opened in July, gets started. "We want the supervision teams to understand where enforcement works and why and how," he said. "We want the enforcement team to understand how supervision and examinations work." The bureau was created by the 2010 Dodd-Frank financial oversight law to prevent the lending abuses that occurred in the run up to the 2007-2009 financial crisis. There has been tension between the bureau and banks since it was created as the new cop on the beat figures out how aggressively it will police the industry. Despite some concerns, Cordray, who took the job in January, has gotten good marks overall from the industry for being accessible and willing to consider suggestions from the banks. "So far so good as far as it's gone," Bartlett said at the Chamber event earlier this week, noting that even the concerns over examiners and enforcement staff working together have begun to ease. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions