In a report published on March 25, 2019, the Office of Inspector General (OIG) found that the Consumer Financial Protection Bureau’s (CFPB) Division of Supervision, Enforcement, and Fair Lending (SEFL) scheduled and abruptly canceled examinations for institutions outside of its supervisory jurisdiction. SEFL also at times scheduled examinations for institutions in the incorrect region.

According to the report, at the time these examinations were scheduled, SEFL did not have sufficient information about companies to determine whether they were large market participants. (Large market participants are organizations with revenues from debt collection exceeding $10M annually.) The report notes that:

[I]t is sometimes challenging to determine whether an institution is a larger participant in particular markets, most notably in the debt collection market. Similarly, the location of an institution’s operations may not be publicly available information. As a result, the regional offices can become aware of this information through a preexamination questionnaire, which SEFL sends to the institution after it prioritizes and schedules an institution for examination.

These preexamination questionnaires, if not provided in a timely manner, can lead to “abrupt, late-stage cancellations [of the examinations] and potentially lead to an inefficient use of examiner resources.”

Debt collectors seem to be the ones impacted by these cancellations. The OIG found that two debt collectors that fell outside of the scope of the CFPB’s jurisdiction had examinations scheduled and then later canceled before the start date. Persons interviewed by the OIG stated:

[A]ssessing whether debt collectors, in particular, satisfy the Larger Participant Rule is challenging because the collection of certain types of debt, such as medical debt, does not contribute toward meeting the Larger Participant Rule threshold, and information on the types of debt collected by an institution is often not publicly available.


One way the CFPB aims to fix the late-stage cancellation issue is by sending information request letters that would help the Bureau assess whether an institution falls under its supervisory authority. The CFPB allegedly increased the lead time for sending these letters. However, the report found that in the time period between November 2015 to October 2018, only the most recent examination cycle included this additional lead time.

The report’s recommendation, which the CFPB concurred with, is to add additional lead time to the information request letters before scheduling examinations to avoid abrupt, late-stage cancellations.

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