On May 24, the Consumer Financial Protection Bureau (CFPB) released ethics regulations for its employees. The bureau said it drafted the regulations because it determined that existing government ethics laws did not sufficiently address the ethics issues posed by the CFPB’s mission and responsibilities.
“We would be hard pressed to ensure that markets for consumer financial products and services are fair, transparent and competitive without the trust of citizens and financial institutions in our work,” the bureau said. “To build and protect that trust, we are working to establish a strong ethics and compliance program.”
The bureau said its regulations:
Restrictions on outside employment and business activities;
Prohibitions on the ownership of certain financial interests;
Restrictions on seeking, obtaining or renegotiating credit and indebtedness;
Prohibitions on recommendations concerning debt and equity interests;
Disqualification from participating in certain bureau matters based on credit or indebtedness;
Prohibitions on purchasing certain assets; and
Restrictions on participating in particular matters involving outside entities.
The CFPB said it studied the ethics regulations of other federal regulatory agencies including the Federal Reserve Board and drafted similar rules.
“In other cases, however, the new rules are modified to reflect the scope of the bureau’s supervisory authority over both banks and nonbanks that provide a wide range of consumer finance products,” the CFPB said. “For instance, the bureau decided to create a list of specific financial holdings that employees may not own rather than a general prohibition on a class of financial holdings. This list is tailored to include only businesses that are subject to examination by the bureau.”
According to the bureau, the rules will take effect on June 26. In addition, it noted that comments from the public are welcome.