On December 2, the OIG for the Fed and the CFPB published a report criticizing the CFPB’s Office of Supervision Examinations’ process of onboarding depository institutions that transition to its oversight. The report indicated that, of the 90 transitions that occurred from 2017 through 2023, the Office of Supervision Examinations failed to complete those transitions timely or effectively. For example, the report highlighted regional offices often completed “key onboarding steps several months after the institutions transitioned and some of the key steps more than a year after the institutions transitioned.” The report attributed these delays to a lack of centralized monitoring and oversight, which has led to inconsistencies, with one regional office developing its own guidance regarding the onboarding process for new depository institutions while other offices did not.
As a result of these deficiencies, the report recommended the CFPB enhance its onboarding process for transitioning depository institutions — at the headquarters level specifically — by establishing clear objectives, defining roles and responsibilities, and developing a comprehensive officewide policy that outlines management’s expectations, including key onboarding steps, expected time frames, and guidance on coordinating with prudential regulators. Additionally, the report advised the CFPB to implement monitoring methods to ensure the effective execution of the onboarding process. This included creating a tracking mechanism to ensure onboarding steps have been completed, obtaining feedback from transitioned institutions, and facilitating a forum for regional offices to share experiences and support improvement efforts.
The Bureau implemented a new onboarding policy in September 2024 (before the OIG issued its draft report to the agency), outlining steps and time frames for the process. However, the OIG’s report suggested more updates were needed to fully address the recommendations. The CFPB plans to complete these updates by the fourth quarter of fiscal year 2025.
