WASHINGTON (MNI) – Federal Reserve Gov. Elizabeth Duke Monday
announced the Federal Reserve, the FDIC, the new Consumer Financial
Protection Bureau, the National Credit Union Administration and the
Office of Comptroller of the Currency have signed a memorandum of
understanding on how to coordinate their Dodd-Frank responsibilities.

Such coordination includes scheduling examinations of financial
institutions, conducting simultaneous examinations of covered depository
institutions unless an institution requests separate examinations, and
sharing draft reports of examination for comment. Under the memorandum,
the agencies will coordinate examinations and other supervisory
activities and share certain material supervisory information
concerning:

–Compliance with federal consumer financial laws and certain other
federal laws that regulate consumer financial products and services;

–Consumer compliance risk management programs;

–Activities such as underwriting, sales, marketing, servicing,
collections, if they are related to
consumer financial products or services; and

–Other related matters that the agencies may mutually agree upon.
These coordination undertakings should lead to greater uniformity and
efficiencies in supervision and help to minimize regulatory burden on
covered depository institutions.

Among points covered in the memorandum, according to the
announcement:

1. The Prudential Regulators and the CFPB will each designate a
point of contact for each Covered Institution for purposes of this MOU.

2. The Prudential Regulator and the CFPB points of contact will
consult regarding the scheduling of Covered Examinations of each Covered
Institution and will agree to a reasonable timetable for sharing
scheduling information for the coming year (or supervisory cycle, as
applicable). To carry out such consultation, the Prudential Regulator
and the CFPB points of contact will share information about the scope,
estimated start date and duration, and estimated staffing of each
Covered Examination. Once a schedule for the year (or supervisory cycle,
as applicable) has been established, the points of contact will promptly
notify each other of any material changes.

3. The Prudential Regulators and the CFPB also will share with each
other any Covered Examination request letters to Covered Institutions
relating to Covered Examinations.

4. The Prudential Regulators and the CFPB generally will carry out
Covered Examinations of Covered Depository Institutions in a
simultaneous manner. For purposes of this MOU, examinations are
“simultaneous” if material portions of Covered Examinations by the
Prudential Regulator and the CFPB are conducted during a concurrent time
period pursuant to each Agency’s procedures in order to further the
objectives of this MOU, although more overlap may occur on a voluntary
basis. Furthermore, Prudential Regulator may be carried out either
on-site at Covered Depository Institutions or off-site at other
locations. However, consistent with the objectives of this MOU and the
Agencies supervisory responsibilities, if either the CFPB or the
appropriate Prudential Regulator does not conduct a Covered Examination
of a Covered Depository Institution in the same supervisory cycle, the
other Agency with jurisdiction may examine the Covered Depository
Institution as appropriate.

a. Covered Examinations of Covered Depository Institutions under
continuous supervision by an Agency will be considered simultaneous if
one or more targeted reviews scheduled during a supervisory cycle are
conducted simultaneously by the CFPB and a Prudential Regulator.

b. The Agencies generally will schedule Covered Examinations that
occur on a point-in-time basis simultaneously.

c. Where one Agency examines a Covered Depository Institution as
part of a program of continuous supervision, but another examines it on
a point-in-time basis, the Agencies generally will schedule the
point-intime examination to occur simultaneously with at least one
targeted review conducted as part of the continuous supervision carried
out by the other Agency.

d. Nothing in this MOU shall be construed to require a Prudential
Regulator and the CFPB to conduct any Covered Examination jointly.

5. Pursuant to section 1025(e)(1)(B), a Covered Depository
Institution may request that Covered Examinations by the Prudential
Regulator and the CFPB be conducted separately. The following process
will apply to such requests.

a. The applicable Prudential Regulator and the CFPB will notify
each Covered Depository Institution of Covered Examinations that have
been scheduled to occur simultaneously each year (or supervisory cycle
as applicable) and such notice will provide a reasonable opportunity and
time period for the institution to request that such examinations not be
conducted simultaneously.

b. Unless a Covered Depository Institution requests a longer time
period, an opt-out request will remain in effect until the next time
when the CFPB and the applicable Prudential Regulator plan a
simultaneous exam of that institution.

c. A Covered Depository Institutions request for separate
examinations does not prevent the Prudential Regulator and the CFPB from
independently determining their examination schedules, consistent with
their respective statutory authorities and responsibilities.

6. The CFPB supervisory functions are most efficiently and
effectively performed when affiliated entities under its jurisdiction
are examined concurrently. However, some affiliated Covered Depository
Institutions are supervised by different Prudential Regulators.
Consequently, there may be instances in which it is not possible to
coordinate the examination schedules of multiple Agencies to achieve
simultaneous reviews of all affected Covered Depository Institutions. In
these instances, the CFPB may ask that an affiliated Covered Depository
Institution request that it not have a simultaneous examination by the
CFPB and its Prudential Regulator so that the CFPB may examine the
institution concurrently with its other Covered Depository Institution
affiliates.

7. The CFPB and the Prudential Regulators will share drafts of
Covered Reports of Examination of Covered Institutions for comment. A
draft for purposes of this sharing requirement means a draft in
substantially the form in which the Agency intends to issue the report
to a Covered Institution, pending receipt and consideration of comments
from the other Agency. The receiving Agency will have at least 30 days
after receipt to comment on the draft findings and conclusions
concerning Covered Examinations before the issuing Agency issues the
final Covered Report of Examination. When the Agency providing the draft
Covered Report of Examination requests more expedited review, the
receiving Agency will consider the request and promptly notify the
requesting Agency whether it can be accommodated. If an Agency fails to
transmit comments within 30 days of receipt of a draft Covered Report of
Examination (or within an agreed-upon time period for expedited review),
it will be presumed not to have any comments, and the transmitting
Agency will finalize the Covered Report of Examination accordingly.

8. Prior to issuing a final Covered Report of Examination to a
Covered Institution with findings and conclusions from a Covered
Examination or taking a supervisory action in connection with the
results of a Covered Examination, the CFPB and the Prudential Regulator
shall take into consideration concerns, if any, raised in the comments
made by the other Agency concerning the Covered Examination.

9. The Prudential Regulators and the CFPB will share additional
information relating to Covered Examinations as they deem appropriate in
order to advance the objectives of this MOU. Consistent with those
objectives, additional coordination may occur on a voluntary basis
subject to mutually agreed protocols between a Prudential Regulator and
the CFPB.

** MNI Washington Bureau: 202-371-2121 **

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