With the formation of the CFPB, lending organizations of all stripes have come under increased scrutiny. The CFPB was established in 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Its goal is to help consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives.
CFPB Enforcement Overview – What You Need to Know
The Consumer Financial Protection Bureau (CFPB) is in overdrive, pushing lenders and their service providers to implement Compliance Management Systems, or CMS.
Regulatory pressure is nothing new, but with the added scrutiny of
these regulatory agencies, it important for you to take the necessary steps to ensure your organization fills any compliance gaps that may raise red flags. The best way to plug your compliance holes and meet the expectations of all the agencies concerned with fair lending practices is to fully embrace the CFPB’s guidance and put in place a CMS.
It is vital that you know what a CMS is, how to implement one, or how to make what you are already doing today meet the new standards.
See how well your organization embraces a CMS’s 4 areas of focus and if you can dodge the regulatory pitfalls.
On Demand Webinar
Join us to discuss CFPB & Fair Lending regulatory trends across the financial services industry, and what you can do today to keep your company out of the regulatory crosshairs.
Board of Directors & Management Oversight
Your board of directors and senior management should take an
active role in your compliance efforts. This sets the tone at the top
and defines compliance expectations for the company as well
as its service providers. If management cares about compliance,
everybody else will (or at least should) care about it too.
By setting this example, leadership should appoint a compliance
champion, an individual dedicated to overseeing the compliance
mandates the board establishes. Senior management should also
create the compliance structure into which operational policies,
procedures and standards are placed. They must also proactively
allocate resources to compliance, as well as review periodic reports
and recommend course correction on compliance matters.
On Demand Webinar
Join us to discuss the critical role your Board of Directors and Management play within your Compliance Management System. Learn the requirements for high-level executives as well as best practices for communication within your organization.
Developing a Compliance Program
Your compliance program is the nuts and bolts of a CMS – where the heavy lifting occurs and the easiest place for things to fall through the cracks. Administered by the compliance champion, the program includes approved written policies and procedures, training, monitoring and corrective action. It should give accurate information to help make informed decisions about the organization’s ongoing compliance posture and activities.
Learn the four things you need to do to demonstrate you’re doing the right thing when it comes to your lending practices, and keep yourself out of the regulatory quicksand.
Consumer Complaint Response
Even the best businesses receive customer complaints. From a
compliance perspective, complaints give valuable insight into potential issues. As such, they draw the attention of regulators. A consumer complaint management program is the third element of a CMS. It helps log, track, investigate and resolve complaints in a timely manner. The compliance champion should analyze complaint data to identify and understand underlying issues and business risks.
Contrary to original thought, you don’t have to monitor every possible source of complaint (Facebook, Twitter…etc). Complaint management has become business critical and organizations need to properly protect themselves.
On Demand Webinar
Complaint management has become a critical business element. Learn what you need to do to protect yourself in this on demand webinar. Organizations need to effectively address and evaluate consumer data and have properly implemented tools to navigate this sticky area.
the CFPB recommends an objective audit of a company’s operations to ensure compliance with legal requirements, as well as internal policies and procedures. The word “audit” may sound scary, but it isn’t. Your organization’s personnel may conduct an audit; however, they must be independent to the functions being audited. This provides objectivity and eliminates conflicting self-interest.
The audit function can start small and build over time. Start by
manually examining a random sample of 10 or 20 transactions each month to make sure all internal processes are being followed and the paperwork is complete. If it’s not complete or a problem is discovered, it may be time to teach or retrain employees. A CMS can streamline the audit process and provide ongoing assurance and validation that obligations are being met.
On Demand Webinar
When you have employees and managers inspecting their own work, they can either miss or hide the truth. The key is an independent, objective audit. Join us in the on-demand webinar to learn how a Compliance Audit fits in as part of the CMS within the CFPB guidelines.