This week’s question ponders how to balance audit reporting with staying in compliance with consumer finance laws.
Q: In connection with audit reporting, should we include operational risk elements and/or process inefficiencies that could lead to noncompliance with consumer financial laws?
David: Yeah, thanks, Michael. Yes, you should…operational deficiencies that can lead to a problem down the road, you absolutely should include them. You need to… When we talked about that earlier… Don’t focus all the time on just regulations. Look at processes, look at look at where your risks are, whatever they may be. And if you can help the business shore them up, then you’ll just put them much further ahead. So absolutely, you should pay attention and focus on that and report them.
Michael: Let me just add to that. What many companies do is, they sort of bake their compliance into their system, which is an appropriate way of addressing it. So that naturally invokes the operational aspects of the organization. So you should be, in your monitoring program, even before you get to audit, your monitoring program should be reviewing changes to operational procedures and that sort of thing with an eye towards, “Is this going to impact our compliance with a particular federal consumer financial law?”
David: Let me add that, too. One of the things we do here is, as I said earlier, we can’t and won’t write policy. But any policy change that the business makes and procedure change has through come to us for approval because then we can vet it against any, you know, regulations or things like that. So, you know, we can help them keep their policies where they need to be.
This week, the “A” in our Q&A comes to us courtesy of Michael Benoit and David Keene.
Michael Benoit, Partner
Michael Benoit, the man with his finger on the regulatory pulse, will provide an overview of the CFPB’s audit requirements. As an attorney with Hudson Cook, Michael provides legal advice on wide range of consumer financial services law topics, and represents clients in investigation and enforcement matters involving the Federal Trade Commission and the Consumer Financial Protection Bureau.
David Keene, Director of Compliance
Sierra Auto Finance
David Keene, who has done more audits than we can count, will share his checklist of the areas he never misses during his audits. In his position at Sierra Auto Finance, David has managed an especially complex web of compliance demands and processes. No wonder he’s earned recognition as a Certified Consumer Credit Compliance Professional and Certified Compliance & Ethics Professional.