Last week, the CFPB laid out a draft five-year strategic plan (Plan) to accomplish its “mission” to “make markets for consumer financial products and services work for Americans.” For those of you hoping that the Plan would set forth the specifics on the Bureau’s regulatory ambitions, you will be disappointed. Instead, the 21-page Plan is full of bright colors, large fonts and broad generalized statements borrowed from previous declarations by the CFPB. If you read between the lines, however, the Plan contains some disturbing clues regarding what the CFPB specifically hopes to accomplish..
The Plan sets forth:
- Four strategic goals that outline what the CFPB aims to achieve;
- The 11 desired outcomes that support these CFPB goals;
- The 25 strategies the CFPB will pursue to accomplish its outcomes;
- The 27 performance measures the CFPB will use to assess its progress; and
- Four performance indicators the CFPB will track to assess its progress toward achieving its outcomes.
The Plan’s stated goals are ubiquitous restatements interpreting the Bureau’s obligations under Dodd-Frank Act. For example, the Bureau’s first goal is to “Prevent Financial Harm to Consumers While Promoting Good Practices That Benefit Them.” Goal two is not much better: “Empower Consumers to Live Better Financial Lives.” It is only when the CFPB begins to map out its outcomes and strategies that we get a sharper sense of, and concern about, CFPB’s specific plans.
In accomplishing its goal of “Promoting Good Practices,” the CFPB relies exclusively on supervision and enforcement. The CFPB is also not shy about the fact that to achieve these goals it will “share information” and “coordinat[e] activity” with “fellow regulators and law enforcement agencies.” The Plan also makes painfully clear the CFPB intention to “examine many financial institutions” regardless of whether the institution is accused of any wrongdoing. Indeed, one of the CFPB’s own “performance indicators” is the number of “supervision activities (examinations, target reviews, or horizontal reviews) opened during the fiscal year.” Moreover, to further cement the analogy of the CFPB as the “big brother” of the financial services industry, it is the CFPB’s stated intent to develop a “technology solution for supervising entities and coordinating supervisory information. An enhanced system will be capable of recording, storing, tracking, and reporting real-time information on all aspects of the CFPB’s supervisory mandate.” “Promoting Good Practices” is clearly the CFPB’s euphemism for exercising its broad and unchecked enforcement, regulatory and rulemaking authority.
While the Plan is still in draft form, the final version is not likely to offer any additional specifics regarding the Bureau’s regulatory plans. Stay tuned to the CFPB-Lawblog for updates and analysis as this story evolves.