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Open Recommendations (16 total)

Financial Technology: Products Have Benefits and Risks to Underserved Consumers, and Regulatory Clarity Is Needed

GAO-23-105536
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of the Consumer Financial Protection Bureau should issue clarification on the application of the Truth in Lending Act's definition of "credit" for earned wage access products not covered by its November 2020 advisory opinion. (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Blockchain in Finance: Legislative and Regulatory Actions Are Needed to Ensure Comprehensive Oversight of Crypto Assets

GAO-23-105346
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of the Consumer Financial Protection Bureau should jointly establish or adapt an existing formal coordination mechanism with CFTC, FDIC, the Federal Reserve, NCUA, OCC, and SEC for collectively identifying risks posed by blockchain-related products and services and formulating a timely regulatory response. To facilitate these objectives, this mechanism could include formal planning documents that establish the frequency of meetings and processes for identifying risks and responding to them within agreed-upon time frames. (Recommendation 1)
Open
CFPB neither agreed nor disagreed with the recommendation. In April 2024, several of the financial regulators told us that the Financial Stability Oversight Council (of which CFPB, CFTC, FDIC, the Federal Reserve, NCUA, OCC, and SEC are members) established a formal coordination mechanism through the creation of the Digital Asset Working Group to promote information sharing and enhance interagency coordination in identifying potential risks in the digital asset space. They stated that the working group meets regularly and has discussed a variety of topics, including regulatory developments, rulemaking, risks, data collection, and market developments. The establishment of the Digital Asset Working Group is a positive step towards implementing a formal coordination mechanism that can identify and address risks posed by blockchain-related products and services. To fully implement the recommendation, the agencies should develop planning documents for the working group. Such planning documents could include (1) objectives and meeting frequency; (2) processes for identifying the full range of risks and regulatory challenges concerning blockchain-related products and services (not only those related to financial stability); and (3) processes for responding to these risks and challenges within agreed-upon timeframes.

Private Student Loans: Clarification from CFPB Could Help Ensure More Consistent Opportunities and Treatment for Borrowers

GAO-19-430
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of CFPB should provide written clarification to nonbank private student loan lenders on their authorities under the Fair Credit Reporting Act to offer private student loan rehabilitation programs that include removing information from credit reports. (Recommendation 1)
Open
As of June 2023, CFBP does not plan to act on this recommendation because the law does not require nonbank private student loan lenders to seek CFPB's approval of student loan rehabilitation programs. CFPB stated that if a financial institution chooses to offer a private student loan rehabilitation program it would be protected under the Fair Credit Reporting Act. Since issuance of our report in May 2019, CFPB was involved in a process led by the Consumer Data Industry Association (CDIA) to revise credit reporting guidelines which included new standards for how lenders should report information on rehabilitated private student loans to credit reporting agencies. In June 2023, some nonbank private student loan lenders told us that, with the development of the new credit reporting guidance, they were comfortable they had authority to offer rehabilitation programs. However, clarification from CFPB could still help resolve any remaining uncertainties among nonbank private student loan lenders.

Financial Technology: Agencies Can Better Support Workforce Expertise and Measure the Performance of Innovation Offices

GAO-23-106168
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3 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of the Consumer Financial Protection Bureau should fully incorporate leading workforce planning practices in the primary offices involved in policymaking and oversight related to financial technology by conducting strategic workforce planning that addresses financial technology; collecting staff skillset data and determining the critical financial technology skills the agency needs; developing targeted strategies to address financial technology-related skills gaps; and measuring the effectiveness of its financial technology-related training in addressing skill needs. (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Consumer Financial Protection Bureau The Director of the Consumer Financial Protection Bureau should develop performance goals and measures for CFPB's Office of Competition and Innovation that cover key aspects of the office's activities, such as outreach to industry participants, and that are clear, targeted, and measureable. (Recommendation 2)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Consumer Financial Protection Bureau The Director of the Consumer Financial Protection Bureau should develop performance measures that are specific to its strategic objectives related to supervisory technologies. (Recommendation 3)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Consumer Data Protection: Actions Needed to Strengthen Oversight of Consumer Reporting Agencies

GAO-19-196
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of CFPB should assess whether its process for prioritizing CRA examinations sufficiently incorporates the data security risks CRAs pose to consumers, and take any needed steps identified by the assessment to more sufficiently incorporate these risks. (Recommendation 2)
Open
In July 2020, CFPB staff noted that they were assessing whether, and if so, how and when, to incorporate data security risks into their supervisory prioritization. As part of that evaluation, CFPB is assessing whether those processes should incorporate data security risks CRAs pose to consumers in light of the agency's statutory authorities, supervisory responsibilities, and resources. We have requested additional information from CFPB on their response to this recommendation, but as of September 2023, the agency has not provided us any new information. GAO will continue monitoring CFPB's assessment of prioritization of CRA data security risks.

Financial Technology: Agencies Should Provide Clarification on Lenders' Use of Alternative Data [Reissued with revisions on Mar. 12, 2019.]

GAO-19-111
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of the Bureau of Consumer Financial Protection should, in coordination with the federal banking regulators and with input from relevant stakeholders, communicate in writing to fintech lenders on the appropriate use of alternative data in the underwriting process, including issues to consider when selecting types of alternative data to use. (Recommendation 1)
Open
In December 2019, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (the agencies) issued an interagency statement on the use of alternative data in credit underwriting. The statement broadly highlights some potential benefits and risks of using alternative data and encourages firms to responsibly use alternative data. However, the statement does not provide firms or banks with specific direction on the appropriate use of alternative data. In March 2021, the federal banking regulators and the Consumer Financial Protection Bureau (CFPB) issued a request for information (RFI) on Financial Institutions' Use of Artificial Intelligence, including Machine Learning, and in July 2021, the banking regulators issued proposed third party risk management guidance for comment, both of which discuss alternative data. In June 2023, the banking regulators issued final interagency guidance on third party risk management, but the guidance does not address specific topics, such as alternative data, or specific types of third-party relationships, such as relationships with fintech companies. Further, the banking regulators and CFPB have not issued any documentation related to the RFI as of April 9, 2024. To fully implement this recommendation, CFPB needs to provide, in coordination with the federal banking regulators, finalized written communication that gives banks that engage in third party relationships with fintech lenders specific direction on the appropriate use of alternative data in the underwriting process. Without such direction, banks partnering with financial technology lenders may not effectively manage associated risks, including compliance with fair lending and other consumer protection laws.

Community Banks and Credit Unions: Regulators Could Take Additional Steps to Address Compliance Burdens

GAO-18-213
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of CFPB should issue public information on its plans for reviewing regulations applicable to banks and credit unions, including information describing the scope of regulations the timing and frequency of the reviews, and the extent to which the reviews will be coordinated with the federal depository institution regulators as part of their periodic EGRPRA reviews. (Recommendation 2)
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CFPB staff noted in a letter in April 2018 that CFPB had issued requests for information (RFI) on the regulations their agency had adopted and inherited from other agencies. These requests seek public comment on the need to amend the regulations. Staff noted that they included in their spring and fall 2017 Semiannual Regulatory Agenda descriptions of two initiatives intended to review their regulations to identify opportunities to modernize and streamline provisions. In addition, they noted creation of an internal task force to coordinate and bolster efforts to relieve regulatory burdens. Staff stated that they would continue to publish information on their plans as appropriate. As of May 2020, CFPB's implementation was still in progress. At that time, the agency intended to create a coordinated plan of reviews as a supplement to the assessments of significant rules (Dodd-Frank Act Section 1022(d)) and Regulatory Flexibility Act (RFA) Section 610). In September 2020 and most recently in March 2023, staff advised us that they did not have any update on the implementation of the recommendation.

Financial Literacy: Better Outcome Reporting Could Facilitate Oversight of Programs for Older Adults and People with Disabilities

GAO-24-106381
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1 Open Recommendations
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of CFPB, as vice chair of the Financial Literacy and Education Commission, should coordinate with the chair and agencies represented on the Commission to encourage the ongoing collection of data on financial literacy program outcomes and include these data in the Commission's annual report to Congress. (Recommendation 2)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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