An auto finance company would be lucky to undergo a federal examination, according to Consumer Finance Protection Bureau deputy assistant director Calvin Hagins.
Of course a regulator would say something like that, right? Actually, Hagins has a great point. “The purpose of the exam is to determine regulatory compliance,” he said during a panel discussion during the 2017 Auto Finance Risk & Compliance Summit, “but it’s also to learn about the business of auto.”
In other words, the CFPB isn’t just looking for issues, but insight from business leaders. And during an exam, your company should place the Bureau under the same scrutiny they subject your organization to.
“The objective is for [members of the Bureau] to learn what actually happens in real life,” said Hagins, “not what happens in a textbook.” He conceded that there’s a lot examiners can learn from industry veterans: “We count on you all to help inform our examiners when we’re kind of marching down a list without actually thinking.”
That’s right—a high-ranking official at the CFPB admitted that regulators aren’t always using their brains. Watch Hagins’ unexpectedly frank commentary for yourself: