Mark Olson says that CFPB is raising additional concerns as it ramps up in practice:
Two disturbing bits of recent information give us a taste of how the CFPB plans to operate. Representatives from the CFPB have acknowledged that lawyers from the bureau’s enforcement division are accompanying CFPB compliance examiners on their routine examinations....
The second disturbing bit of information concerns the manner in which examination findings are shared with other agencies. Because of the confidential nature of bank examination reports, there is a precise protocol for how government agencies share information. This is to guard against information gathered for one purpose by one agency being used by another agency for a different purpose. For example, there are good and obvious reasons why the IRS does not share personal tax information with other agencies outside a court order. There is also a wide concern that the CFPB, which has a Congressional mandate limited to consumer compliance, might use information collected by the safety and soundness regulators (Office of the Comptroller, FDIC, and Federal Reserve) in its enforcement efforts. With such an initiative, the CFPB would be sending an early signal that it does not intend to be limited in its scope by either precedent or Congressional directive. Hopefully the safety and soundness regulators will recognize the implications of such a request and will resist.
There is good reason why the new CFPB should feel it has a mandate for aggressive supervisory action. But just as in the old west, where vigilance committees quickly became vigilantes, there will be a fine line between the CFPB managing its new powers to achieve greater compliance with consumer laws and regulations, and the potential of an army of CFPB lawyers administering frontier justice on providers of financial services.