The CFPB's Examination Authority Over MSBs

New and existing money services businesses frequently ask when or if the CFPB will "examine" them. All consumer financial services businesses naturally worry about the CFPB's reach and want to be prepared. This article outlines the factors that could lead to CFPB examination of an MSB.

It's important first to understandthe distinction between "supervisory" authority and enforcement authority. The former relates to whether the CFPB can conduct a formal examination of the company, while the latter relates to when the CFPB can bring an enforcement action.

The CFPB's enforcement authority is extremely broad. The CFPB can bring an enforcement action under any of the "Federal consumer financial laws," including UDAAP and eighteen other enumerated consumer laws. UDAAP alone will give the CFPB very broad authority to bring an enforcementactionagainst an MSB for its acts and practices involving consumers.