During the recent NABD Compliance Academy held in Las Vegas, hundreds of dealers from the “Buy Here Pay Here” (BHPH) community gathered to discuss the CFPB and their requirements for a “Compliance Management System” (CMS) in their dealerships. As is typical with new regulation from our Federal Government, the rules have been rolled out in a vague manner, allowing for a great deal of interpretation.
Four Recommendations for an effective CMS under the CFPB’s rules:
1- Board of directors and management oversight
2- A compliance program
3- A consumer complaint management program
4- An independent compliance audit
You can see the full description of each recommendation here.
What we know is that there are four recommended elements under the CFPB’s rules for a CMS. These rules apply to consumer lending institutions, including BHPH dealers. Even where the CFPB does not have direct control, such as with franchise dealers, they are using the lending institutions that service the dealers as a channel to impose their compliance standards; and this is done by holding the lending institution responsible for the behavior of the dealers in areas such as disparate impact, etc.
CFPB On Demand Webinar – What You Need to Know
Complí is proud to bring to you the first in a series of webinars that will provide you with practical guidance to navigate these new obligations: