Don’t look now, but you’re being watched. Yes, the CFPB’s new enforcement philosophy has precipitated a wave of state consumer finance regulators who are, in some cases, just as aggressive as the feds ever were. There’s a swarm of government agencies and consumer watchdogs monitoring your financial services organization’s practices and compliance program. They’re scrutinizing you for gaps and errors related to data breaches, consumer privacy concerns, military borrowing, debt collection, and—of course—unfair, abusive, and deceptive acts and practices.
What gives? Isn’t the Consumer Financial Protection Bureau shrinking under new director Mick Mulvaney? Didn’t he say the CFPB wouldn’t be looking for excuses to bring lawsuits?
Yes, he did. But the fact is that despite what its opponents may hope, the CFPB has not been shuttered or eliminated. And more important, Mulvaney’s enforcement philosophy has precipitated a wave of state consumer finance regulators—a minestrone-flavored wave of regulatory alphabet soup—who are, in some cases, just as aggressive as the feds ever were. Not that federal enforcement is no longer an issue: lenders still have to contend with the OGs (original G-men) at the Federal Trade Commission.
In other words, compliance still matters. Enforcement isn’t going away now, nor should organizations expect it to soon, considering that look-back periods will be in place when the CFPB comes under new management. Moreover, while power in Washington, DC is always in flux, the law is the law. And as we’ve learned time and time again, compliance is just good business.
So watch yourself. Because others already have you in their sights.