Establishing a Financial Consumer Protection Supervision Department : Key Observations and Lessons Learned in Five Case Study Countries

This technical note is intended to assist policymakers and regulators seeking to establish a financial consumer protection supervision department (FCPSD) within the main financial regulatory body of a country. Concrete, practical information and lessons are drawn from the experiences of five countries: Armenia, the Czech Republic, Ireland, Peru, and Portugal - all of which have been operating a successful FCPSD for at least five years. The note covers the key aspects of the design process: supervisory agenda, organizational structure, supervisory activities, relationship with prudential supervision, and staffing needs. While there is no unified, orderly approach to establishing an FCPSD, many useful observations can be made from the common obstacles, including a lack of internal support, perceived conflicts of interest with prudential supervision, capacity constraints, and the inherent difficulties of starting up operations for the new (and potentially very broad) topic of financial consumer protection. How an FCPSD is established is highly dependent on country context: legal framework for the financial sector, organization of the main financial regulator, political priorities, current stage of development of financial markets, major consumer protection concerns, and other important factors. A comparative table summarizing the main elements in the establishment of FCPSDs in case study countries can be found in annex A