read

4 Must-Do's to Meet the CFPB Code of Conduct

Since 2011, the Consumer Financial Protection Bureau (CFPB) has provided about $13.2 billion in relief to consumers from their enforcement actions against businesses who have violated consumer protection laws. Many issues stem from UDAAP violations (like lack of disclosures and usage of deceptive language in advertisements, to name a few)

But what can organizations do to get out ahead of issues and be proactive?

To help them answer this vital question, the CFPB offers guidance on what they consider to be Responsible Business Conduct. The publication includes activities that businesses can engage in that the Bureau may view favorably and consider when exercising its enforcement discretion.

What can your organization do to find favor with the CFPB?

According to the CFPB's guidelines on Responsible Business Conduct, there are four activities that businesses should conduct:

Self-monitoring

Self-monitoring refers to the a business’s proactive commitment to early detection and prevention of violations. As part of self-monitoring efforts, businesses should keep detailed records that clearly show their efforts in adhering to the latest CFPB rules and regulations.

Self-reporting

Should a violation or potential violation occur, businesses should immediately report it to the CFPB. Through self-reporting, businesses can provide concrete evidence of their commitment to compliance with consumer financial laws. Self-reporting also shows a willingness to "do right" for the consumer.

Remediation

If a business does violate a regulation, the business is expected to resolve the issue in a timely and effective manner. This response should include holding accountable the individuals who are responsible for the misconduct. Additional remediation actions include providing redress to harmed consumers and preventing the violation from reoccurring.

Cooperation 

In the event that a violation or multiple violations occur, businesses need to demonstrate cooperation with the CFPB. They must review the violations and provide the CFPB with the results in a timely fashion. A willingness to cooperate shows that the business is committed to remediating the situation for the betterment of consumers now and in the future.

By carrying out the above four activities, businesses increase their likelihood of winning the CFPB’s good favor. The CFPB would likely do some or all of the following to reward responsible business conduct:

  1. Resolve an investigation with no public enforcement action. (If public enforcement can be avoided, then your business will be able to avoid bad press.)
  2. Treat the conduct as a less severe type of violation.
  3. Reduce the number of violations pursued.
  4. Reduce the sanctions or penalties sought by the Bureau in an enforcement action.

The Bureau recognizes that a robust compliance management system appropriate for the size and complexity of a party’s business will not always prevent violations, but it will often facilitate early detection of potential violations, which can limit the size and scope of consumer harm.

PerformLine Can Help Your Business Follow CFPB Guidelines

The PerformLine platform, an automated marketing compliance monitoring platform, can be used to help your business mitigate risk. PerformLine makes it easy for any business to:

  1. Self-monitor: PerformLine monitors for and detects marketing compliance violations on the internet, in call centers, chat sessions, emails and social media.
  2. Self-report: PerformLine provides daily reports on marketing compliance violations.
  3. Remediate: PerformLine centralizes tracking and documentation of all compliance and remediation activity.
  4. Cooperate: PerformLine provides a complete history of discovery through remediation for Proof You Can Use™ in any audit situation.

When the future of your business is at stake, shouldn't you be using the best available tools? To learn more about an effective way to "stay on the CFPB's good side," contact PerformLine to learn more about the PerformLine marketing compliance monitoring platform today. Your business and consumers will thank you!

Download our checklist to evaluate your compliance practice.

Tags: Regulatory Compliance, CFPB, Risk Management, Compliance Monitoring

Understanding and complying with UDAAP policy can be a challenge

Download this guide to learn what every company should know to reduce exposure to Unfair, Deceptive or Abusive Acts and Practices (UDAAPs) and other common compliance violations.

UDAAP-e-book-1