2010-23487. Designated Transfer Date

AGENCY:

Bureau of Consumer Financial Protection.

ACTION:

Notice.

SUMMARY:

Pursuant to the Consumer Financial Protection Act of 2010 (“CFP Act”),^[1] the Secretary of the Treasury designates July 21, 2011, as the date for the transfer of functions to the Bureau of Consumer Financial Protection (“CFPB”). On this “designated transfer date,” certain authorities will transfer from other agencies to the CFPB, and the CFPB will be able to exercise certain additional, new authorities under the CFP Act and other laws. After consulting with the heads of the agencies whose functions will transfer to the CFPB, as well as the Director of the Office of Management and Budget, the Secretary finds that designating July 21, 2011, as the transfer date will advance the mission of the CFPB and promote an orderly and organized startup.

FOR FURTHER INFORMATION CONTACT:

Wally Adeyemo, Office of the Chief of Staff, Department of the Treasury, 1500 Pennsylvania Avenue NW., Washington, DC 20220; telephone number: [phone]; e-mail address: [e-mail].

DATES:

The designated transfer date shall be July 21, 2011.

SUPPLEMENTARY INFORMATION:

On July 21, 2010, the President signed into law the CFP Act, which is title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 1062 of the CFP Act, in relevant part, requires the Secretary to designate a single calendar date for the transfer of functions, under section 1061, to the CFPB.

Consultation With Transferor Agencies

Section 1062(a)(1) requires the Secretary to consult with the heads of the seven “transferor agencies” ^[2] and the Director of the Office of Management and Budget (“OMB”) and, in accordance with section 1062(c)(1), select a date between 6 and 12 months after the date of enactment of the CFP Act as the designated transfer date. Following enactment of the Act, the Secretary conducted a meeting with the heads of the transferor agencies and the OMB Director. Treasury staff, working on behalf of the Secretary and for the CFPB, also consulted with the transferor agencies and OMB to obtain additional input on issues relating to the transfer date.

Functions of the CFPB

On the designated transfer date, the “consumer financial protection functions” ^[3] currently carried out by the Federal banking agencies, as well as certain authorities currently carried out by the Department of Housing and Urban Development and the Federal Trade Commission, will be transferred to the CFPB. In particular, as of the designated transfer date, the CFPB will assume responsibility for consumer compliance supervision of very large depository institutions and their affiliates and promulgating regulations under various Federal consumer financial laws.^[4] The transfer of certain employees from six of those agencies to the CFPB must also occur within 90 days after the designated transfer date.^[5] New authorities of the CFPB under subtitle C of the Act, as well as other consumer protection provisions, will become effective on the designated transfer date as well.^[6]

In the intervening period, the CFPB will lay the groundwork for an efficient transfer and prepare for consumer protection activities after July 21, 2011. For instance, prior to the designated transfer date, the CFPB will begin to conduct research relating to consumer financial products and services, develop its nationwide consumer complaint response center, plan and take steps to implement the risk-based supervision of nondepository covered persons, and prepare for the opening of outreach offices.

Development of the supervision program for certain nondepository covered persons is particularly significant because no Federal agency previously has had the responsibility of supervising these entities, such as payday lenders, mortgage companies, debt collectors, and consumer reporting agencies.^[7] Prior to the designated transfer date, the CFPB will begin the significant task of building this supervision program, including hiring and training examination staff and making preparations necessary to begin a risk-based supervision program.

The CFPB will also work during the intervening period to prepare for the new authorities that will transfer or take effect as of the designated transfer date, for instance by planning the orderly integration of bank, thrift, and credit union examiners from five different Federal agencies and preparing for rulemakings required under the Dodd-Frank Wall Street Reform and Consumer Protection Act. For example, the CFPB is holding a roundtable to begin gathering public input regarding the merger of overlapping mortgage forms required by the Truth in Lending Act and Real Estate Settlement Procedures Act.

Congress contemplated that the lead time for the “orderly implementation” of the CFPB's functions could range between 6 to 18 months after the date of enactment.^[8] To fulfill the statutory goal of an “orderly and organized startup” of the new agency,^[9] the CFPB should be provided a reasonable period of time to develop its operations and organization prior to the transfer of functions and employees from other agencies. A transfer date of July 21, 2011, 12 months after the date of enactment, will provide the CFPB an appropriate period of time to hire and assign employees to support its new functions, as well as to plan and make important decisions necessary to build a strong foundation for the new agency.

Designation

For all of the reasons set forth in this notice and in light of the comments provided by the transferor agencies and the Director of OMB, the designated transfer date under section 1062(a) of the CFP Act shall be July 21, 2011.

Timothy F. Geithner,

Secretary of the Treasury.

Footnotes

1.  Tit. X, Public Law 111-203.

2.  Section 1061(a)(2) of the CFP Act defines the terms “transferor agency” and “transferor agencies” to mean—“(A) the Board of Governors (and any Federal reserve bank, as the context requires), the Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Department of Housing and Urban Development, and the heads of those agencies; and (B) the agencies listed in subparagraph (A), collectively.”

3.  Section 1061(a)(1).

4.  See, e.g., Section 1025(b); subtitles C and H.

5.  Section 1064(b)(1).

6.  See, e.g., section 1037.

7.  Section 1024(b) (requiring the CFPB to implement a risk-based supervision program for covered persons described in section 1024(a)(1)).

8.  Section 1062(c) (providing that the designated transfer date must be a date between 180 days and 12 months after the date of enactment of the CFP Act, subject to an extension of up to 18 months after the date of enactment).

9.  See section 1067(a)(1).