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UDAAP and Fair Lending Compliance: A Simple 2-Step Approach

By PerformLine
June 2, 2022
udaap fair lending compliance

As UDAAP and fair lending regulatory developments continue to unfold, compliance professionals face the difficult task of ensuring compliance within a complex and ever-changing regulatory landscape.

How can organizations get in front of regulatory scrutiny? The solution might be simpler than you think.

In a recent webinar, John Henson, General Counsel at ConsumerAffairs, talked about the simple approach to compliance that he coaches his team on.

“Compliance is really easy, it’s a two-step process. Tell the customer what you’re going to do, and then you do it. Any gap between those two things is a compliance concern. This is incredibly true in UDAAP, and it’s also very true in fair lending.”
– John Henson, ConsumerAffairs

​​It’s about making sure that you treat people well, John says. Can you explain to the customer what you’re going to do? Then, once you do it, does it match what you said you would do from the customer’s perspective? Does it happen in such a way that the customer understands exactly what happened? Any gap between these two steps, John says, is a compliance concern. 

If there is a gap between those two steps, then there's something off in the customer experience. It’s not enough just to ensure that the initial marketing piece is compliant, but everything else after that has to be, too, including landing pages, emails, and other marketing materials. You should focus on the entire customer experience from beginning to end—the customer experience IS the compliance.

This two-step process will help your team cover ground for UDAAP, fair lending, and so many other consumer protection laws. This will also lead to increased bandwidth to focus on the more technical aspects of compliance, such as APR rates, proper disclosures, etc. This process will also help your organization ensure fairness because consumers will know exactly what they’re signing up for and what they can expect.

To hear more from John, watch the webinar here, or listen to the podcast here.

Looking for more expert insights to help tackle your biggest marketing compliance challenges? Download the expert playbooks here.

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Tags: UDAAP, Fair Lending