“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,” Representative James Renacci (R-Ohio) said during a House Financial Services Committee hearing, according to Reuters.
Industry executives said that other regulatory agencies do not often show up with enforcement staff, so the CFPB’s actions have led many to believe that intimidation is the objective.
“Sort of like showing up to a Sunday school picnic with a 12-gauge shotgun,” Steve Bartlett, the head of the lobbying group The Financial Services Roundtable, said, Reuters reports.
CFPB Director Richard Cordray, however, stressed that there was no need for concern.
“It’s not an attempt to create some sort of macho message that we’re sending,” Cordray said, according to Reuters. “People shouldn’t read any message into that and none is intended.”
Cordray added that he has spoken with the CEOs of financial institutions to assure them that the supervisory and enforcement staffs are simply attempting to become more familiar with the way the other operates, Reuters reports.
“We want the supervision teams to understand where enforcement works and why and how,” Cordray said, according to Reuters. “We want the enforcement team to understand how supervision and examinations work.”
After the opening of the CFPB in July, tensions have grown between the bureau and banks as the regulator plans how to best supervise the industry. Cordray has been recognized by the industry for his willingness to address concerns, take suggestions and answer questions.