CFPB Bulletin 2016-02

The Bulletin emphasizes that the Consumer Financial Protection Bureau (CFPB) expects supervised banks and nonbanks to manage their relationships with service providers in a way that ensures compliance with Federal consumer financial law.

“The mere fact that a supervised bank or nonbank enters into a business relationship with a service provider does not absolve the supervised bank or nonbank of responsibility for complying with Federal consumer financial law to avoid consumer harm. A service provider that is unfamiliar with the legal requirements applicable to the products or services being offered, or that does not make efforts to implement those requirements carefully and effectively, or that exhibits weak internal controls, can harm consumers and create potential liabilities for both the service provider and the entity with which it has a business relationship. Depending on the circumstances, legal responsibility may lie with the supervised bank or nonbank as well as with the supervised service provider.” (Page 2)