In case you haven’t heard (you have), the Consumer Financial Protection Bureau has a new Acting Director, and a new emphasis on enforcement based on “quantitative analysis” of consumer harm rather than regulatory “envelope pushing.” With Mick Mulvaney in charge, the Bureau has dropped a number of investigations and pending lawsuits against lenders, and its purview appears to be rapidly diminishing in breadth and scope.
In light of this turn of events, I would not be surprised if executives at banks, consumer and commercial finance companies, vehicle financiers, mortgage lenders, and other credit companies have started to plan extended vacations in 2018. But before you book your trip to Aruba, it’s important to keep a couple things in mind:
What that means is that now is a great opportunity to get your compliance house in order. As enforcement slows at the federal level, savvy lenders are taking the time to update and optimize their compliance management systems. Why not take care of your compliance housekeeping items now, as opposed to when the pendulum swings back the other way and you’re playing catch-up?
The Dodd–Frank Wall Street Reform and Consumer Protection Act requires the CFPB to conduct “look-backs” every five years to assess whether laws are being enforced effectively and as intended. Lenders should use this opportunity to do the same and investigate their own compliance management systems. It’s not just a wise move for the future, but a necessary risk mitigation approach in the present.
Keep in mind that your current compliance initiatives could come to bear on audit, investigation, or lawsuit within the next few years. In short, now is the perfect time to invest in an automated, flexible CMS designed to meet regulatory needs now and well into the future.
For more consumer lending predictions and guidance, make sure to catch up on Consumer Finance in the Trump Era.
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