Any time a regulator shares its observations of where violations are occurring and what you can do to prevent them, it’s worth taking note. This includes the Fed’s December 2019 Consumer Compliance Supervision Bulletin. The publication’s goal is to increase transparency into what the Fed is seeing in the consumer compliance arena and offer practical advice for reducing risk—and this month fair lending risk related to internet-based marketing takes a front seat.
After months of speculation about modernizing the Community Reinvestment Act (CRA), the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corp (FDIC) finally released their notice of proposed rulemaking for the regulation’s first overhaul in 25 years.
(An update on Dodd-Frank’s Section 1071) Ever since Dodd-Frank was enacted in 2010, we’ve been waiting on the Consumer Financial Protection Bureau (CFPB) to implement Section 1071, which amended the Equal Opportunity Act to require financial institutions to collect and report information about credit applications submitted by small businesses and women-owned or minority-owned businesses.
The requirements of a compliance management system (CMS) seem relatively simple. The primary functional regulators agree that there are three crucial elements of a good CMS: Board and management oversight of change management, risk management and corrective actions A formal compliance program with policies, procedures, training, monitoring and complaint responses An audit function
Why do Home Mortgage Disclosure Act (HMDA) Loan Application Register (LAR) violations happen? Weaknesses in compliance management systems (CMSs), according to Matthew Nixon, program officer in the National Credit Union Administration’s (NCUA) Office of Consumer Financial Protection.
Your institution might be using compliance analytics software and services for Fair Lending, HMDA, CRA, or Redlining so that it can recognize risks, increase transparency and grow smartly. But are you making the most of that data from a risk management perspective? Not if that data is only used by the lending, credit, or compliance departments. While compliance and lending are the most closely linked to Fair Lending risk, the truth is that Fair Lending extends into many operational areas. From marketing to the location of new branches to M&A, Fair Lending risk has a role to play in decision making.