From an enforcement perspective, last week was a particularly difficult week for financial services providers. Standard Chartered Bank, early in the week, agreed to a $340 million settlement with the New York Department of Financial Services over allegations of breaches of Iranian sanctions. That was followed by a call by U. S. Senator Carl Levin for federal regulators, which had not issued charged against Standard Chartered, to get some "backbone." Senator Levin, the reader might recall, last month led a hearing into allegations of money laundering by HSBC in which he accused it of having a "perversely polluted culture." On Wednesday, it was reported that the New York and Connecticut Attorneys-General were issuing subpoenas to seven large banks in furtherance of their investigation into LIBOR rate-rigging.
It was in that context that an interesting development was reported at the Consumer Financial Protection Bureau (CFPB). The CFPB's original logo was what appeared to be a police badge, and its website originally proclaimed "there is a new cop on the beat." Last week, it ran a job posting for investigators for "investigations that may involve delicate matters, issues, and investigative problems for which there are few, if any, established criteria." Duties would also include gathering facts about "business partners of a specific business, clients of that business" and acting "as a witness for CFPB in litigation," as well as arranging for "contracts with local investigators (such as private investigators)." Those hired also would "conduct surveillance activity to develop both intelligence and evidence," and the surveillance activities would be "to identify subjects, their activities, and their associates." Each investigator would receive a salary of $98,000 to $149,036.
A CFPB official reportedly assured that civil liberties would not be violated.
Nonetheless, in the current relatively hostile enforcement environment, the CFPB's hiring practices appear more ominous than might otherwise be the case.