Banks Say New Agency's Oversight Is Slow, Costly
The threat, Williams said, stems from a resource imbalance between banks and regulators. The government can't afford bank-level salaries or complex risk management systems, leaving a large "sophistication gap" between them and the banks, he said. Before the 2008 financial crisis, banks took advantage of this disparity by taking on risks that their regulators didn't fully understand.
CFPB officials say they strive to help banks comply with the agency's rules by publishing guidance and manuals used by its field examiners, and through webinars and other outreach.
Yet many in the industry say their relationships with the agency have grown strained as they attempt to work with inexperienced regulators who have had little preparation.
"It's unfortunate that banks are really kind of the training ground for examiners, but hopefully they are learning the nuances of the industry," Garwood said.Hunt is president and CEO of the Consumer Bankers Association, the leading trade group representing retail banking operations of the nation's biggest banks, including Bank of America, Wells Fargo and JPMorgan Chase. The CBA loudly opposed the bureau when it was first proposed. Since Congress created it as part of a sweeping 2010 financial law, the trade group has pushed to limit its independence. Banks and their allies in Congress, mostly Republican, vowed to block any nominee for director of the consumer agency until its leadership was divided between a bipartisan commission and Congress was given more control over its budget. President Barack Obama installed Cordray while Congress was in recess, so the appointment did not require lawmakers' approval. The consumer agency's budget currently comes out of the Federal Reserve's profits, which otherwise would be returned to the Treasury. Banks in the Federal Reserve system paid $387 million in 2012 to fund the CFPB and the Office of Financial Research, a small advisory office inside the Treasury Department, the Fed said last week.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV