Coordinated Supervision NACARA Denver, CO Septmember 21,

Introductory Session Panelist, Edwin Chow – CFPB Panelist, Terance Fancy – Maine Panelist, Chuck Cross – CSBS 2

Title 3 Coordinated Supervision Background 2011 Information Sharing MOU 2013 Supervisory Coordination Framework and State Governance Agreement 2014 Coordinated Exams begin 2015 Release of Coordinated Exam Guidance

Title 4 Framework Responsibilities Coordinate Examination Schedules Quarterly Update Meetings Independent Examination Schedules Designation of SPOC & EIC Necessary Processes & Additional Protocols Notices, Corrective Actions, and Information Exchange

Current SCC 5 ASSOCIATIONREPRESENTATIVE CSBSCharles A. Vice, KY Albert Forkner, WY NACCAJoe Mulberry, WY Mike Larsen, ID NACARACarmine Costa, CT Terance Fancy, ME MTRADoug Buras, LA Robin Lobb, KS AARMRCindy Begin, MA Rod Carnes, GA NASCUS Support Staff Linda Jekel, WA Mary Ellen O’Neil, CT Chuck Cross, CSBS Sabrina Bergen, NASCUS

CFPB Leadership 6 REGIONREPRESENTATIVE WestEdwin Chow – Regional Director and Lead RD for state coordination initiatives NortheastAgnes Bundy Scanlan – Regional Director MidwestAnthony Gibbs – Regional Director SoutheastJames Carley – Regional Director HeadquartersDavid Bleicken Chris Young

7 SCC MMC State Mortgage Regulators MMET State MSB Regulators NACARA State Debt Collector Regulators NACCA State Payday Regulators CSBS Hierarchy of Coordinated Supervision

8 Examinee Selection Process Examinees selected through iterative process between the SCC & CFPB Selection based on product lines, business volume, risk, consumer complaints, previous exam results, etc SCC and CFPB share list of potential examinees SCC and CFPB discuss risk profile of companies on each list Examinees of common interest identified CFPB-SCC meeting to schedule coordinated exams

Examination Schedule Industries to be examined 9 total Mortgage Origination/Servicing (6 companies) Payday Lending (1 company) Debt Collection (2 companies)

Examination Schedule Industries to be examined 11 total Mortgage Origination/Servicing (5 companies) Money Transmitter (2 companies) Payday Lending (1 company) Debt Collection (3 companies)

Examination Schedule Industries to be examined 15 total Mortgage Origination/Servicing (7 companies) Money Transmitter (2 companies) Payday Lending (2 companies) Debt Collection (2 companies) Auto Finance (2 companies)

State Examination Procedures Mortgage: MMC management and processes – Established and mature – ComplianceEase software for origination exams Debt Collection: NACARA – Processes in development – History of multi-state exams Payday Lending: NACCA – Newly developed procedures Money Transmitters: MMET – MMET/MTRA examination procedures

Focus on State Coordinated Debt Collection Process NACARA developed procedures comprise the technical content, working templates, and report of exam of state examination procedures. Coordinated examination procedures govern the administration of the examination. NACARA establishes exam team and selects SPOC and EIC. SPOC/EIC responsible for scoping exam and assigning duties and coverage. Information requests and exchange. Shared meetings. Findings and state report of exam.

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Coordinated Examination Procedures Rollout and Approval Released in June for beta testing as pilot by Coordinated Exam EICs/SPOCs Revisions as necessary in 2015 Will go through final CFPB and SCC approval processes after pilot-testing during 2015

Coordinated Examination Procedures – General Principles and protocols for communications and coordination Supervisory Plan for examining each entity subject to coordinated examination – Pre-Exam Examination scoping, planning, staffing, and information requests – Examination Meetings w/ company, information sharing, and exam coordination – Post-Exam CFPB and respective State Regulatory Authority approves findings, conclusions, and ratings Coordination on required corrective actions Coordinated meetings with Boards and ownership Follow-up and monitoring on required corrective actions

Coordinated Exam Procedures States continue to assess compliance with state specific laws during exams and execute some of their own exam techniques; however, some states are using the procedures in the CFPB’s Supervision and Examination Manual You can become familiar with CFPB examination procedures by reviewing that manual

Examination Reports/Supervisory Letters Currently, the State Regulatory Authority (SRA) and CFPB will issue separate reports SRA and CFPB will coordinate with one another to ensure findings regarding federal law are consistent between the reports Separate responses are required for the SRA and CFPB reports

Information Interchange Independent ROE Delivery – CFPB to States: Certification and Authorization – States to CFPB: In development Enforcement Notices Non-Coordinated Examination Requests

CSBS is Currently Requesting ROEs on Independent Exams In order to fulfill the state obligation under the Framework CSBS is asking for specific ROEs Beginning with mortgage Upload to MMC site for secure delivery Other areas, including debt collection reports, will begin soon.

Annual Reports to State Regulators The following are excellent sources of information regarding activities and accomplishments of the State Regulatory Authorities: State Coordinating Committee Multi-State Mortgage Committee Multi-State MSB Examination Taskforce All available on the CSBS website

Questions Edwin Chow – Terance Fancy – Chuck Cross –