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What Makes Up A Robust & Effective Compliance Management System?

By Gianna Barrere
June 25, 2020

During our virtual discussion with Richard Cordray, former Director of the CFPB, he shared his insights on a range of timely topics including: managing a remote workforce, navigating the regulatory landscape, creating a strong compliance practice, and how to mitigate risk and avoid enforcement actions from the Bureau.

The final part of this series will discuss how to create a robust and effective compliance management system for your organization, with insights shared by Richard Cordray—many of which we touched on in earlier parts of this series.

According to Corday, a compliance management system is an essential part of any organization to minimize regulatory and reputational risk, and no financial company should be engaging in business without one.

“We've [CFPB] regarded sound compliance management as the first line of consumer protection, and our regulatory efforts secondary to that process. It has always been true that the success of a company begins and ends of how it treats its customers,” says Cordray.

Having a solid compliance management system in place not only protects consumers, but it shows a good-faith effort to comply and, in turn, protects your organization from possible enforcement actions. By putting more money and resources into compliance management, your organization can save a lot of trouble and money in the long run, says Cordray. 

Creating A Strong Compliance Management System

Strong compliance management systems are made up of several parts, including:

Managing Consumer Complaints

Pay attention and respond to consumer complaints—not just the ones submitted directly to your company, but those submitted to the CFPB, FTC, and other regulatory agencies as well. Regulators, specifically the CFPB, will share complaints they receive with your organization and give you an opportunity to respond and resolve issues before they get involved. But, failure to monitor and respond to those complaints can lead to costly penalties.

Staying Current on Regulatory Happenings

Stay up-to-date on lawsuits and enforcement actions happening in your industry. These will give you insight on areas of heavy scrutiny which you can utilize to adjust your processes and get out ahead of any issues. Be sure to also stay current on supervisory highlights and what the regulators are doing with their examinations.

Training Internal Teams

Hold regular training sessions with your compliance team on important regulations, industry happenings, supervisory updates, and recent enforcement actions. You can also supplement training with written materials for reference—but be sure that they are frequently updated with current, complete, and accurate information1.

Establishing Policies and Procedures

Establish policies and procedures for employees to follow in order to meet goals effectively and legally. These should include all information needed to complete their jobs and should be updated regularly as the regulatory environment changes.

Utilizing RegTech

Utilize a Regulatory Technology solution to automate the monitoring of employees and third party partners to ensure they’re adhering to policy, guidelines, and regulations. 

 

Creating a robust and effective compliance management system is critical to protecting your organization and mitigating risk. Learn how PerformLine can help by speaking to one of our experts today.

 

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RESOURCES:

  1. https://www.fdic.gov/regulations/resources/director/presentations/cms.pdf

Tags: Thought Leadership, Complaint Management, Risk Management, Lessons Learned from Former CFPB Director

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