Here’s this week’s question:
Should the compliance budget be tied to profit? What if you are an organization that has no or little profit are they still affected by this?
Unfortunately everyone has the same compliance responsibilities. If you are Bank of America or if you are Joe’s Car Sales, the same laws are going to apply to both entities and you have that same area or that same requirement of having a corporate compliance program.
Bank of America is going to be a whole lot more sophisticated than Joe’s Car Sales, so it really isn’t tied to profitability or number of cars you are selling or receivables you have. The sophistication of it is tied to size but otherwise it is not.
If you look at the CFPB’s examination manual it actually requires that examiners look to see if there is a line item in the budget for corporate compliance. That is something specifically that the bureau is looking at.
What tends to happen with regulators these days…it starts with one. All regulators want to be out there protecting the consumer, and they are all trying to demonstrate that they are doing their job, so they learn from each other. We have seen it with the bureau, and expect that we will be seeing with the FTC and even AG.