CFPB Bulleti

Date: April

Subject: Servi

The Consume

nonbanks to 

ensures comp

interests of co

supervisory an

This Bulletin 

Supervised bank

 Large

affilia

 Certa

5514

Supervised servi

 Servi

and 

 Servi

or sm

Service provider

person that p

offering or pr

service.” (12 

person to whi

Federal consum

(12 U.S.C. § 5

A. Service P

The CFPB re

decision for s

outsource cer

providers to d

from service p

investment. 

n 2012-03 

l 13, 2012 

ice Providers 

er Financial P

oversee their b

pliance with F

onsumers and

nd enforceme

uses the follo

ks and nonbank

e insured depo

ates (12 U.S.C

ain non-depos

4). 

ice providers refe

ice providers t

ice providers t

mall insured cr

r is generally d

rovides a mat

rovision by su

U.S.C. § 5481

ich it provides

mer financial law 

5481(14)). 

Provider Rela

ecognizes that 

supervised ban

rtain functions

develop and m

providers that

Protection Bur

business relati

ederal consum

d avoid consum

ent authority w

owing terms: 

ks refers to the

ository institu

C. § 5515); and

sitory consum

ers to the follo

to supervised 

to a substantia

redit unions (1

defined in secti

terial service to

uch covered pe

1(26)). A servi

s services. 

is defined in s

ationships 

the use of ser

nks and nonba

s to service pr

market additio

t would not ot

reau (“CFPB”)

ionships with 

mer financial la

mer harm. Th

will closely ref

e following en

tions, large in

d

mer financial se

owing entities

banks and no

al number of s

12 U.S.C. § 55

ion 1002(26) o

o a covered pe

erson of a con

ice provider m

section 1002(1

rvice provider

anks. Supervi

roviders due to

nal products o

therwise be av

) expects supe

service provid

aw, which is d

he CFPB’s exe

flect this orien

ntities supervis

nsured credit u

ervices compa

s supervised by

onbanks (12 U

small insured 

516). 

of the Dodd-F

erson in conn

nsumer financ

may or may no

14) of the Do

rs is often an a

sed banks and

o resource con

or services, or

vailable withou

ervised banks 

ders in a mann

designed to pr

ercise of its 

ntation and em

sed by the CF

unions, and th

anies (12 U.S.C

y the CFPB: 

U.S.C. §§ 5515,

depository in

Frank Act as “

nection with th

cial product or

ot be affiliated

dd-Frank Act

appropriate bu

d nonbanks m

nstraints, use 

r rely on exper

ut significant 

and 

ner that 

rotect the 

mphasis. 

PB: 

eir 

C. § 

, 5514); 

stitutions 

“any 

he 

r

d with the 

t

usiness 

may 

service 

rtise 
However, the

relationship w

responsibility

harm. A serv

products or s

requirements 

consumers an

which it has a

may lie with t

provider. 

B. The CF

Title X autho

nonbanks for

purposes and

identified. Ti

supervised se

service provid

authority ove

compliance w

The CFPB wi

providers as a

C. The CFP

The CFPB ex

managing the

expectations c

has the relatio

To limit the p

supervised ba

arrangements

These steps s

 Cond

unde

																						

1 See, e.g., subse

Frank Act, 12 U 2 See 12 U.S.C. 

e mere fact tha

with a service p

y for complyin

vice provider t

ervices being 

carefully and 

nd create pote

a business rela

the supervised

PB’s Supervi

orizes the CFP

r compliance w

d also to exerci

itle X also gran

rvice provider

ders on site.1 

r supervised s

with Title X’s p

ill also exercis

appropriate.2

PB’s Expecta

xpects supervi

e risks of servi

consistently, r

onship with a 

potential for st

anks and nonb

s with service p

hould include

ducting thorou

erstands and is

																						

ections 1024(e),

U.S.C. §§ 5514(

§§ 5531(a), 553

at a supervised

provider does

ng with Federa

that is unfamil

offered, or th

effectively, or

ntial liabilities

ationship. Dep

d bank or nonb

isory Authori

PB to examine

with Federal c

ise its enforce

nts the CFPB

rs, which inclu

The CFPB wi

service provide

prohibition on

se its enforcem

ations

ised banks and

ice provider re

regardless of w

service provid

tatutory or reg

banks should t

providers do n

e, but are not l

ugh due dilige

s capable of co

												

, 1025(d), and 1

(e), 5515(d), 55

36. 

d bank or non

s not absolve t

al consumer fi

liar with the le

hat does not m

r that exhibits

s for both the 

pending on the

bank as well a

ity Over Serv

 and obtain re

consumer finan

ement authorit

 supervisory a

udes the autho

ill exercise the

ers, including 

n unfair, decep

ment authority

d nonbanks to

elationships. T

whether it is a

der. 

gulatory violat

take steps to e

not present un

limited to: 

ence to verify t

omplying with

1026(e), and sec

16(e), 5563, an

nbank enters in

the supervised

inancial law to

egal requireme

make efforts to

s weak interna

service provid

e circumstanc

as with the sup

vice Provider

eports from su

ancial law and 

ty when violat

and enforceme

ority to exami

e full extent of

its authority t

ptive, or abusi

y against super

o have an effec

The CFPB wi

supervised ba

tions and relat

ensure that the

nwarranted ris

that the servic

h Federal cons

ctions 1053 and

nd 5564. 

nto a business

d bank or non

o avoid consum

ents applicable

o implement th

al controls, can

der and the en

ces, legal respo

pervised servi

rs 

upervised ban

for other rela

tions of the la

ent authority o

ine the operati

f its supervisio

to examine fo

ive acts or pra

rvised service 

ctive process 

ill apply these 

ank or nonban

ted consumer 

eir business 

sks to consum

ce provider 

sumer financia

d 1054 of the D

s

nbank of 

mer 

e to the 

hose 

n harm 

ntity with 

onsibility 

ce 

nks and 

ated 

aw are 

over 

ions of 

on 

r 

actices. 

for 

nk that 

r harm, 

mers. 

al law; 

Dodd-
 Requ

contr

appro

conta

 Inclu

comp

any c

or ab

 Estab

servic

 Takin

moni

For more info

that has busin

Supervision and

Abusive Acts o

																						

3 http://www.

content/theme

1), 37 (CMR 6)

uesting and rev

rols, and train

opriate trainin

act or complia

uding in the co

pliance, as wel

compliance-rel

busive acts or 

blishing intern

ce provider is 

ng prompt act

itoring proces

ormation pert

ness arrangem

d Examination M

or Practices.

3

																						

consumerfinan

es/cfpb_theme

), 44 (UDAAP 

viewing the se

ning materials

ng and oversig

ance responsib

ontract with th

ll as appropria

lated responsi

practices; 

nal controls an

complying wi

tion to addres

ss, including te

taining to the r

ments with serv

Manual: Comp

												

nce.gov/wp-

/images/super

1), and 59 (UD

ervice provide

to ensure tha

ght of employe

bilities; 

he service pro

ate and enforc

ibilities, includ

nd on-going m

ith Federal co

s fully any pro

erminating the

responsibilitie

vice providers

liance Managem

rvision_examina

DAAP 6). 

er’s policies, pr

at the service p

ees or agents t

ovider clear exp

ceable consequ

ding engaging

monitoring to 

onsumer finan

oblems identif

e relationship 

es of a supervi

, please review

ment Review and

ation_manual_

rocedures, int

provider cond

that have con

pectations abo

uences for vio

in unfair, dec

determine wh

ncial law; and 

fied through t

where approp

ised bank or n

w the CFPB’s 

d Unfair, Decep

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ternal 

ducts 

sumer 

out 

olating 

ceptive, 

hether the 

the 

priate. 

nonbank 

ptive, and 

2 (CMR