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CFPB Defines 'Responsible Conduct' For Supervised Entities
WASHINGTON (6/27/13)--When launching an enforcement investigation the Consumer Financial Protection Bureau looks for some specific factors to determine whether a financial entity's conduct was "responsible." The bureau has sent out a guidance bulletin to make it clear what some of those factors are.

Only the top four credit unions in total assets are supervised and examined by the CFPB.

The factors the CFPB includes in enforcement discretion include:
  • The nature, extent, and severity of the violations identified;
  • The actual or potential harm from those violations;
  • Whether there is a history of past violations; and,
  • A party's effectiveness in addressing violations.
In addition, the CFPB guidance notes that in addition to those and other factors, supervised entities can engage in certain activities-- both before and after the conduct in question-- that the bureau may favorably consider in exercising its enforcement discretion. A party may:

  • Proactively self-police for potential violations;
  • Promptly self-report to the bureau when it identifies potential violations;
  • Quickly and completely remediate the harm resulting from violations; and,
  • Affirmatively cooperate with any bureau investigation above and beyond what is required.
The CFPB  bulletin refers collectively to the above as "responsible conduct," and notes such conduct "may favorably affect the ultimate resolution of a bureau enforcement investigation."

Use the resource link to read more on this from the CFPB.
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