A Compliance Program is one of the required elements of the CFPB’s Compliance Management System (CMS). Per the CFPB, a CMS is made up of four interconnected elements that must flow through a system where improvements are verifiable. So this leaves many organizations asking the question, “In the eyes of the CFPB, what defines my Compliance Program?”
Definition of a Compliance Program:
A formal, written compliance program with policies/procedures, training, monitoring and corrective action.
Compliance Program 101:
So what does that mean, exactly? Whether you have an automated system or an Excel spreadsheet, your organization must have a systematic way of tracking the distribution, attestation and storage of policies, procedures and trainings provided to the entire workforce so you can substantiate you have a program in place. In addition you must have monitoring setup that tracks results and allows for corrective action to take place. Plan, Do, Check, Act, Repeat.
Want to learn more about implementing a Compliance Program?
Join our free CFPB Webinar series on Thursday, October 23rd to learn:
- The components of a comprehensive Compliance Program
- Federal laws your policies and procedures should address
- Training program requirements and best practices
- How to demonstrate monitoring efforts and corrective action
- Steps to keep your Compliance Program current
Who is the CFPB targeting?
“The CFPB has found one or more situations in which an effective CMS was lacking across the financial institution’s entire consumer financial portfolio, or in which the financial institution failed to adopt and follow comprehensive internal policies and procedures, resulting in a significant breakdown in compliance and numerous violations of Federal consumer financial law.”
The CFPB’s focus has been on Fair Lending as well as auto dealership finance and mortgage servicing. CFPB’s actions are influencing everyone’s way of thinking, regardless of whether you are directly supervised by the CFPB or a different regulatory body. Check out our free CFPB webinar series to deep dive into each required element and learn what you need to have in place when the CFPB comes knocking on your door.