The Consumer Financial Protection Bureau (CFPB) recently announced its new mandatory TILA and ECOA examination procedures to evaluate lender compliance. What is most evident in both of these new procedures is the need for lenders to have a sound compliance management system (CMS) as part of the compliance program. It is no secret that the CFPB considers a CMS a key component of a well-functioning compliance program and it has already been an area of focus for regulators. . ” Yes, the world has officially changed for lenders. Not only is a compliance management system critical to a lender’s continued success, but it is also the law. Lenders must ensure their compliance management system is sufficient to meet the new CFPB standards.
The CFPB is primarily concerned with institutions’ compliance infrastructure: the ability to detect compliance problems and initiate prompt corrective actions. To determine this, auditors will interview management and examine organizational charts to determine whether the financial institution’s internal controls are adequate to ensure compliance.
Poor audit findings can result in fines and increased future scrutiny, while also damaging existing and future business relationships. Does your financial institution have a proper compliance management system in place?
If you have questions about our blog, “Consumer Financial Protection Bureau Mandates Lender Compliance Procedures,” or your institution’s current compliance management system, please contact Offit Kurman labor and employment attorney Ari Karen at firstname.lastname@example.org. Ari has counseled many mortgage banks and financial services firms on the development and implementation of policies and procedures related to allowing institutions to remain compliant with wage hour laws and other labor and employment regulations.
Offit Kurman Attorneys at Law: Financial Institutions Compliance Practice Group
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CFPB Officially Mandates Compliance Infrastructure National Mortgage News