Without compliance, a compliance management system is, well, a “management system”—which means nothing but overhead. Certainly, a CMS should encompass more than just workforce processes, training modules, and activities, but make no mistake: these elements are fundamental, and shouldn’t be treated as an afterthought.
A well-planned, well-implemented, and well-maintained compliance program…
- Prevents or reduces regulatory violations;
- Protect consumers from non-compliance and associated harms;
- Shields your organization from the risks of litigation, which negatively impact
- operational focus,
- and brand reputation;
and helps your organization attract and retain customers.
A compliance program involves the obvious things that come to mind when one hears the word “compliance”: policies, procedures, trainings, guidelines, and so on. Think of it as the nuts and bolts of your CMS. When your compliance program functions properly, the whole CMS operates smoothly, efficiently, and effectively. When your compliance program needs work, it’s like a rusty set of gears or an engine running without oil: it slows down the rest of your CMS and can bring your organization to a grinding halt.
Unlike there is for a car engine, however, there’s no indicator light for a worn down compliance program. How can you ensure your organization is doing the right things when it comes to Fair Lending compliance? You simply can’t know unless you have a framework to follow.
To establish a well-oiled compliance program, you’ll need to answer the following questions:
- What policies and trainings should be place?
- Who’s responsible for what?
- How do staff stay current on changes to laws and regulations?
- How do you operationalize your program?
In this blog post and its follow-up next week, we’ll take a look at these questions, one by one.
What policies and trainings should be place?
While every organization has unique compliance needs, members of the financial services industry need to abide by a specific set of laws and regulations. Every Fair Lending compliance programs should cover the following:
A compliance program cannot address Fair Lending laws in the abstract. Each statute enumerated above includes subset of specific regulations that address a wide range of organizational processes:
- disclosure of nonpublic personal information
- information security
- privacy and security practices of service providers
- an identity theft prevention program
- information sharing with consumer reporting agencies
- advertising and marketing of consumer loans and leases
- approval and denial of loans and leases
- pricing for loans and leases
- compliance training and related materials
- document retention
Whew—quite the list! In part 2 of this discussion, coming next week, we’ll show you how you can break these processes up into manageable tasks by delegating responsibility, staying up to date on regulations, and operationalizing your program.
In the meantime, check out Solution Sets: comprehensive, easy-to-roll out policy packs and training that cover a wide range of topics.