In the October 26, 2016, Federal Register (81 FR 74410, click here) the Consumer Financial Protection Bureau (CFPB) published Bulletin 2016-02 (Bulletin) that revises and replaces Bulletin 2012-03 regarding lenders’ accountability for violations of Federal consumer financial laws by their service providers (see firm website www.bmandg.com for April 18, 2012 firm memorandum on Bulletin 2012-03). This memorandum attempts to summarize the Bulletin’s main provisions, but you are advised to read the Bulletin by clicking on the hyperlink click here. The CFPB expects supervised banks and nonbanks to have an effective process for managing the risks of service provider relationships. The CFPB also expects that the depth and formality of the risk management program for service providers may vary depending upon the complexity, importance and potential for consumer harm – its size, scope, complexity, importance and potential for consumer harm – and the performance of the service provider in carrying out its activities in compliance with Federal consumer financial laws and regulations.
