This story appeared in Bank Digest.
The Office of Inspector General for the Consumer Financial Protection Bureau and the Federal Reserve Board has issued a report to assess whether the CFPB effectively identifies and avoids the risk of potential conflicts of interest for vendors supporting the work of the bureau's Office of Fair Lending and Equal Opportunity. This office works to ensure that consumers have fair, equitable, and nondiscriminatory access to credit for mortgages and other loans.
The OIG did not find actual conflicts of interest, but it said one vendor's relationships with supervised entities heightened the risk of possible conflicts of interest and increased the need for more timely vendor disclosures and communications. The OIG also found that performing more work internally rather than choosing to outsource that work may effectively mitigate such risks. The report also contains recommendations to reduce the bureau's exposure to operational and reputational risk.