The statutory framework for supervision of large depository institutions and their affiliates and for non-depository consumer financial service companies are largely the same. Is this statement true or false?

The statement is false. The statutory framework for the supervision of large depository institutions and their affiliates significantly differs from that of non-depository consumer financial service companies.

Large depository institutions, such as banks and credit unions, are subjected to strict regulations often governed by federal laws such as the Bank Holding Company Act and Dodd-Frank Act. These institutions are closely monitored by federal regulators like the Office of the Comptroller of the Currency (OCC) and the Federal Reserve, focusing on their safety, soundness, and compliance with consumer protection laws.

In contrast, non-depository consumer financial service companies, like payday lenders or mortgage brokers, may be governed by different regulatory frameworks, which can vary widely by state. These entities are monitored primarily for consumer protection concerns, especially regarding their lending practices and compliance with laws such as the Truth in Lending Act and the Fair Lending provisions, among others.

The differences arise because depository institutions are usually insured by the federal government and have a significant impact on the overall financial system, necessitating a more rigorous and uniform regulatory approach. Non-depository institutions, on the other hand, tend to operate under varying state laws, reflecting the need for tailored regulations that consider their different operational models and risks to consumers.