The CFPB has issued its Financial Report for fiscal year 2012. The report is divided into two parts: one part contains management’s discussion and analysis and the second part contains the CFPB’s financial statements and note disclosures.
The report indicates that the CFPB grew from about 663 employees as of the end of FY 2011 to 970 as of the end of FY 2012 (which ended September 30). As of the end of FY 2012, the CFPB’s Division of Supervision, Enforcement and Fair Lending and the Division of Research, Markets and Regulations represented, respectively, 46.9% and 9% of total CFPB positions. During FY 2012, the CFPB received $343.3 million in fund transfers from the Fed (more than double the $161.8 million in funds transferred in FY 2011). Despite its significant growth during FY 2012, the report indicates that, as of the end of FY 2012 “the CFPB was still below the full employment levels and funding it estimates for its steady state in future years.”
The section of management’s discussion devoted to CFPB performance and results reviews the CFPB’s priorities in support of its goals of “build[ing] a great institution” and “deliver[ing] tangible value.” It also discusses strategies and results of three divisions: Supervision, Enforcement and Fair Lending, Consumer Education and Engagement, and Research, Markets and Regulations.
The size of the CFPB’s Division of Supervision, Enforcement and Fair Lending relative to the CFPB’s other divisions, particularly the Division of Research, Markets and Regulations, reinforces concerns we have previously voiced about the CFPB’s use of its enforcement authority as a substitute for rulemaking. The report also confirms that the CFPB is on-site at the largest depository institutions and that it likewise has exams underway at numerous other depository institutions, mortgage originators, mortgage servicers, and payday lenders. Apparently none of those exams were concluded at the time the report was prepared, since the report makes no mention of the results of the exams. In addition to the enforcement actions that have previously been announced, other enforcement actions seem likely, in that the report advises that the Office of Enforcement has investigations under way both as a result of referrals from the prudential regulators and as the result of work done by its own staff, and is working on several fair lending investigations transferred from other agencies.