What would a headline like this to do your business?
Citizens Bank Ordered to Pay $18.5 Million for Failing to Credit Full Deposit Amounts
Or a news story, such as this one?
Consumer Financial Protection Bureau finds Santander Consumer USA, one of the largest U.S. auto lenders, overcharged “protected groups”
You might respond with something like “we’re a small business compared to these companies. It wouldn’t happen to us.” But that would be a false assumption. No matter the size of your company or organization, there are undoubtedly numerous regulatory requirements you must adhere to — and prove to auditors and regulators that you are in compliance. If you aren’t in compliance, you run the risk of being in regulatory cross hairs. And that can be very costly.
The Consumer Financial Protection Bureau, Department of Justice, Federal Trade Commission, 50 state Attorneys General… regulators across the board are increasing scrutiny on lending practices and stepping up enforcement when violations are uncovered. Regulatory pressure is nothing new, but with the added oversight of these regulatory agencies, it important for you to take the necessary steps to ensure your organization fills any workforce compliance gaps that may raise red flags.
Attorneys General in 44 States Fine SiriusXM $3.8 Million in Consumer Fraud Case
The blow-back to your company, even if non-compliance was unintentional, can be devastating not only to your bank account but to your reputation, and that alone can be difficult to overcome. So what can you do to protect yourself?
Regulators, and specifically the CFPB, expect every entity to have an effective compliance management system (CMS) adapted to its business strategy and operations. And if you still are operating under a manual system, you may think you’re doing corporate compliance right, but may not be able to prove it.
- Board of director oversight
Directors and senior management should take an active role in your compliance efforts. This sets the tone at the top and defines compliance expectations.
- Compliance program
This is the nuts and bolts of a CMS – where the heavy lifting occurs and the easiest place for things to fall through the cracks. It includes policy and procedure, training, monitoring and correction.
- Consumer complaint response
A response system helps log, track, investigate and resolve complaints in a timely manner. The compliance manager can analyze complaint data to identify and understand underlying issues and business risks.
The CFPB recommends an objective audit of a company’s operations to ensure workforce compliance with legal requirements, as well as internal policies and procedures.
A solid CMS can proactively address the risks relevant to your organization while meeting multiple regulatory requirements. It can shine a light on problems that may be a symptom of deeper issues within your organization. Properly administered, it can fix those issues before they blow up into something costlier, like this headline suggests:
Flagstar Bank to Pay $37.5 Million for Blocking Mortgage Borrowers’ Attempts to Save Their Homes
This on-demand webinar features two experts in the fields of regulatory oversight and setting up a CMS. Join Bill Himpler, AFSA’s Executive Vice President of Federal Government Affairs and Brian Larson, Complí’s Resident Financial Services Expert, as they discuss CFPB & Fair Lending regulatory trends they’re seeing across the industry, and what you can do today to keep your company out of the headlines.