Message from DFI Director Charlie Clark:
As the COVID-19 pandemic is affecting our local economy here in the state of Washington, I am reminded of the importance of state-level financial regulation. The Department of Financial Institutions performs an essential public function.
We have a mandate to protect consumers, ensure safety and soundness, and promote economic growth – all three are important at all times, but particularly in a pandemic. In recently years, we have worked closely with other state and federal regulators to make sure that our efforts are coordinated. You may hear this effort referred to as networked supervision.
Coordinated Consumer Protection
Our agency receives approximately 1,700 consumer complaints per year. We investigate consumer complaints to ensure that state and federal legal requirements are being met.
It is extremely important that each consumer has a clear understanding of the terms around financial products and services, has comfort that the transaction is free from fraud and deception, and is receiving a financial product or service that is fair and in compliance with all consumer protections.
With larger financial service providers that operate regionally or nationally, we often coordinate investigations with other state and federal regulators who also have jurisdiction.
For example, in the area of mortgage origination, we have participated in coordinated investigations that have included state mortgage regulators, the Consumer Financial Protection Bureau (CFPB), and state attorneys general, including our own Washington State Attorney General, Bob Ferguson. We have also participated in similar coordinated investigations in connection with violations of securities law.
When it comes to ensuring that our financial institutions are operating in a safe and sound manner, we coordinate examinations with other regulators as well.
For our state chartered banks, we coordinate examinations with the FDIC and Federal Reserve, and, for our state chartered credit unions, we coordinate with the NCUA. In the non-depository space, we have made great strides in coordinating examinations with other states and the CFPB.
Our agency is an active member within the Conference of State Bank Supervisors (CSBS). CSBS has several initiatives to streamline and network multistate supervision.
These exciting efforts include initiatives to reduce the number of exams a company receives in a given year through a focus on information sharing and better coordination among states.
Another initiative that states are working on is an effort to streamline the licensing process for money transmitters that want to get licensed regionally or nationwide and improvements to the Nationwide Multistate Licensing System.
Another exciting CSBS initiative is the creation of a new State Examination System to create greater efficiencies in the examination process and allow for easier information sharing between a licensee and state regulators.
As we continue our examinations throughout the pandemic, all of these advancements are proving to support coordinated supervision and complement efforts to have our examiners work remotely.
Promoting Economic Growth
The variety of institutions our agency supervises play a crucial role in stabilizing the economy and providing financial choices for consumers. Our securities registrants support efforts to raise capital and promote economic growth.
Our banks, credit unions, and non-depository lenders are on the front lines to administer small business loans, emergency lending programs, and other relief for both Washington businesses as well as individuals.
For these relief programs to work as intended, it is vital that our institutions administering relief are operating in a safe and sound manner.
Lastly, through our consumer outreach programs, we are working hard to help educate Washingtonians about the importance of making sound financial decisions and avoiding scams.
I am confident that all of this important work, along with the work of other government agencies and other efforts of Washingtonians will help us get through this difficult time.
DFI Director, Charlie Clark