Who is the CFPB?
The Consumer Financial Protection Bureau (CFPB) supervises depository institutions with total assets of more than $10 billion, and their affiliates. The Bureau also has authority under the Dodd-Frank Act to supervise non-banks, regardless of size, in specific markets. This means auto dealers and lenders are now at risk of non-compliance, according to CFPB guidelines, if they do not have a CMS (compliance management system) in place.
What is a Compliance Management System?
The CFPB has defined four areas of compliance management to ensure the prevention of violations:
1- Board of directors and management oversight;
2- A compliance program;
3- A consumer compliant management program; and
4- An independent compliance audit
You can see the full description of each recommendation here for auto dealer compliance.
Why is this important?
You need only to look at what the FTC (Federal Trade Commission), the OCR (Office of Civil Rights) and others have done over the last decade to surmise the direction CFPB is headed. The CFPB expects every entity it supervises to have an effective CMS adapted to its business strategy and operations. Similar processes have taken shape in healthcare over the years and it’s clear that the Feds recognize the ability to drive both consumer protection and financial gains for their agencies with this approach.
Be sure to catch our upcoming webinar with legal expert Patricia Covington from Hudson Cook as we discuss the CFPB and the crucial requirements for auto dealer compliance and what need to do to meet to ensure an effective compliance management system.