CFPB Declares Data-Centric Future with New Strategy. Are You Ready?

Written by Andy Barksdale | Apr 18, 2013 3:45:00 PM

The Consumer Financial Protection Bureau continues to provide a transparent view into their priorities by updating and sharing their strategic plan. After reading the strategic plan for fiscal years 2013-2017, it is clear that it is moving towards a data-centric future. Is your compliance management program ready to embrace this new world?

1: The Mission of the Consumer Financial Protection Bureau

To help consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives.

3: Ways to Achieve the Mission

1. Data-Driven Analysis

2. Innovative Use of Technology

3. Valuing the best people and great teamwork

4: Primary Bureau Goals

1. Prevent financial harm to consumers while promoting good practices that benefit them. $235m or 43% of 2013 Budget (69% yoy growth)

2. Empower consumers to live better financial lives. $104m or 19% of 2013 Budget (92% yoy growth)

3. Inform the public, policy makers, and the CFPB’s own policy-making with data-driven analysis of consumer finance markets and consumer behavior. $62m or 11% of the 2013 Budget (80% yoy growth)

4. Advance the CFPB’s performance by maximizing resource productivity and enhancing impact. $142m or 26% of the 2013 Budget (96% yoy growth)

46%: Growth in Employees

Year-over-year increase in Full Time Employee (FTE) Staffing in 2013 (1,214 FTEs) compared to 2012 (831 FTEs). 141 of the 383 new employees in 2013 will be staffing up the Supervision, Enforcement, and Fair Lending program (563 total by fiscal year-end 2013).

81%: Growth in the Budget

Year-over-year increase in Fiscal Year Budget from 2012 to 2013. The $541m budget supports ongoing operations and new investments in human capital, technology and facilities, as well as consumer research and financial education activities.

$4.8m: Investment in HMDA (2013 & 2014)

The Bureau is scheduled to invest heavily in HMDA development and implementation. This likely includes the formal definition, release and plan to implement HMDA Plus (adding new data fields as outlined in Dodd-Frank).

Clear Signals About "More": Throughout the strategy document, it becomes abundantly clear that they will continue to devote time and resources that will allow it to become a data centric organization. Their strategy shines the guiding light towards technology, data aggregation, monitoring and analysis.

More Data

“The CFPB is a data-driven agency. We take in data, manage it, store it, share it appropriately, and protect it from unauthorized access. Our aim is to use data purposefully, to analyze and distill data to enable informed decision-making in all internal and external functions.”
$4.8m total investment over the next two years for HMDA development and implementation: “Support a concept-of-operations study and development of future- state functional requirements in consideration of a potential review/redesign of the current HMDA framework.”
“Automate data analysis in order to review loan files more thoroughly, use supervision resources more efficiently, and streamline the on-site portion of the exam. This tool will improve the Bureau's ability to assess compliance with Federal consumer financial laws, including fair lending laws, and assess and detect risks to consumers.”

More Technology

“Technology is core to the CFPB accomplishing its mission. This means developing and leveraging technology to enhance the CFPB’s reach, impact, and effectiveness. We strive to be recognized as an innovative, 21st century agency whose approach to technology serves as a model within government.”
“Continue implementing a tool capable of reviewing loan and deposit portfolios for compliance with Federal consumer financial laws.”

More Analysis

“Acquire and analyze qualitative and quantitative information and data pertaining to consumer financial product and service markets and companies.”

Bottom Line: The future of regulatory compliance will include more data, more technology, and more analysis. This is not a new message, but the chorus is playing louder than ever before. This data-centric approach is true for all the regulators, not just with the CFPB.

When it comes to this data-driven regulatory world, the story your lending data conveys can be understood by looking backwards (i.e. reviewing your lending data from days past); however, the future must be managed by looking forward. More than ever, it is critical to know your numbers through HMDA Fair Lending analysis and act upon the results.

TRUPOINT Partners can help you review the past, monitor the present and manage the future. We've collaborated with ISGN to offer the new CFPB Compliance RiskCheck™; click here to learn more!

Request your free 2013 CRA Geoanalysis Report here!