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CFPB's New "Responsible Conduct" Guidelines: Will They Incentivize Greater Self-Reporting and Self-Regulation by Consumer Finance Firms?

Bloomberg BNA

Philip M. Cedar, Alex Dempsey, Benjamin B. Klubes

On June 25, 2013, the Consumer Financial Protection Bureau (CFPB or the Bureau) issued CFPB Bulletin 2013-6, titled ‘‘Responsible Business Conduct: Self-Policing, Self-Reporting, Remediation, and Cooperation.’’ The CFPB issued the guidance to provide entities with a set of ‘‘activities’’ that they can engage in that the ‘‘Bureau may favorably consider in exercising its enforcement discretion.’’ The CFPB hopes and expects that the guidance will convince financial institutions and others that fall within the CFPB’s broad jurisdiction to engage in additional self-policing and self reporting. The Bureau apparently believes that by releasing these guidelines, regulated entities will be more comfortable cooperating with the Bureau both prior to and during its enforcement investigations.

The Bureau’s guidance specifically identified four categories of activities that would be considered when determining whether the regulated entity should receive ‘‘some form of credit’’ for their actions: (1) selfpolicing; (2) self-reporting; (3) remediation; and (4) cooperation. While the CFPB noted that there may be additional activities that will factor into their decision, these four categories will be the principal categories used by the CFPB.

Originally published in BNA's Banking Report; reprinted with permission.

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