All terms

Examination

Examination — An examination is a supervisory review conducted by a prudential regulator or the CFPB to assess compliance with federal consumer financial law, obtain information about an entity's activities and compliance systems, and detect risks to consumers and markets.

For nondepository covered persons — including larger participants in the consumer debt collection market — the authority and purposes are set at 12 U.S.C. § 5514(b)(1). The CFPB's March 2022 debt collection examination procedures organize the work into modules covering the entity's business model; communications; information sharing, privacy, and interactions with consumer reporting agencies; validation notices, disputes, complaints, and ceasing communication; payment processing and account maintenance; ECOA; and litigation practices, administrative wage garnishment, repossession, and time-barred debt. Most collections firms never see a CFPB examiner directly; they experience examination second-hand, as bank clients pass through requests generated by their own supervisory cycle.

See also

• SamplingSampling is the selection of a subset of accounts, calls, letters, or files for transaction testing, sized and structured to support a conclusion about the compliance of the whole population.
• TPRMTPRM, or third-party risk management, is the bank discipline of identifying and managing the risks arising from business arrangements with outside parties — including the law firms and agencies to which it places collections work — across the full life cycle of the relationship.
• Consent orderA consent order is a negotiated administrative order in which a respondent agrees, without necessarily admitting the findings, to conduct requirements, compliance obligations, and monetary relief enforceable by the issuing agency.
• AttestationAn attestation is a formal assertion about the design or operation of controls — either a management certification or an independent practitioner's report such as a SOC report — relied on by a bank in lieu of, or alongside, its own testing of a third party.

Where this appears

• Bank Third-Party Risk Management: What Do the Interagency Expectations Mean for a Law Firm Being Supervised?

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