CSBS Issue Briefings - August 2020

Talking Points

• States and federal regulators have a long-standing agreement to coordinate in compliance supervision: In 1996 state and federal regulators signed the Nationwide State/Federal Supervisory agreement and accompanying protocol, which established a framework for coordinated examinations and enforcement, regardless of exam type. • The 1996 agreement recognized that an institution’s consumer compliance functions have a critical impact on its safety and soundness. • Even for states that do not have the resources or desire to conduct compliance exams, the state, as the chartering authority, must have the unconditional ability to fully participate in meetings and receive examination findings related to compliance issues. • State regulators believe that federal regulators should adopt more stringent expectations regarding the duration of examinations. • Federal regulators should issue guidance to the industry regarding the use of models for fair lending analysis and to establish regulatory expectations for market pricing variations. • Congress should amend the statutory requirement mandated by the Equal Credit Opportunity Act (ECOA) for federal banking regulators to refer ECOA violations to the U.S. Department of Justice (DOJ). • Federal banking regulators should be empowered to review and resolve potential fair lending issues without being obligated to refer all cases to the DOJ.

SME Contact: Daniel Schwartz, Director of Policy Development: (202) 728-5742 or Dschwartz@csbs.org

Date Updated: 08/25/2020

FOR STATE REGULATOR USE ONLY