CFPB emphasizes 3 elements for possible early termination of consent orders
Finance companies that reach consent orders with the Consumer Financial Protection Bureau received a bit more clarity about them this week.
The bureau issued a policy statement on applications for early termination of consent orders that outlines process for entities subject to a consent order and the standards that the bureau intends to use when evaluating applications.
In order for a consent order to be terminated early, the CFPB explained that an entity should have:
— Demonstrated that it meets certain threshold eligibility criteria
— Fully complied with the terms of the consent order
— A satisfactory compliance management system in applicable areas
“These conditions are designed to minimize the risk of new violations of law by the company and to protect consumers,” the regulator said in a news release.
Officials noted that an entity’s application for early termination should be submitted to the bureau point of contact specified in the consent order.
“In general, an application should demonstrate that the entity has satisfied all of the conditions for granting early termination described in the policy statement,” the CFPB said.
The agency went on to mention that bureau staff will review applications and make recommendations to the director about whether to terminate a consent order.
Under the policy, the sole authority to terminate a consent order remains with the bureau’s director and the termination decision is at their discretion.
The CFPB recapped that consent orders, which generally have a five-year term, describe the bureau’s findings and conclusions concerning the identified violations by an entity and generally impose injunctive relief, monetary relief, penalties and reporting, recordkeeping and cooperation requirements.
“They play an essential role in the bureau’s enforcement work by providing relief for consumers and deterring future violations,” the bureau added.
To read the entire policy statement regarding consent orders, go this website.