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Government watchdog endorses regulatory review at CFPB

The Government Accountability Office issued a report Feb. 27 recommending that the Consumer Financial Protection Bureau review its own regulations to ensure that it is not overly burdening community banks. The report specifically called out the bureau's TILA-RESPA Integrated Disclosure rule and encouraged the bureau to review other possibly "time-consuming" rules like those concerning qualified mortgage and Home Mortgage Disclosure Act data.

The CFPB, in return, agreed with the recommendations and promised to solicit public input on how the bureau pursues regulation.

The GAO's recommendations appear to align with Acting Director Mick Mulvaney's efforts to re-examine the bureau's operations and open public comment on how stakeholders think the bureau should function. Because the Economic Growth and Regulatory Paperwork Reduction Act process does not cover the CFPB, the GAO said the onus is on the CFPB to hold itself publicly accountable.

The GAO report also addressed community bank burdens imposed by the other financial regulators, and asked the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and the National Credit Union Administration to develop plans to streamline regulation. The GAO singled out Bank Secrecy Act and anti-money laundering compliance as a pain point for community banks, but acknowledged that the bulk of responsibility for BSA/AML falls on the Financial Crimes Enforcement Network. The GAO noted that FinCEN is receptive to burden associated with the time and expenses required for compliance but does not want to make changes to BSA/AML assessments that would reduce law enforcement's ability to track illicit activity.