Commercial lenders have a reputation for thinking they don’t need to worry about compliance and fair lending. A commercial lender’s bottom line is the bottom line. They don’t want to “waste” time on anything that doesn’t generate revenue.
The battle over Consumer Reinvestment Act (CRA) modernization is heating up as the Federal Reserve shared its plans for CRA reform and the House Financial Services Committee held a hearing assessing the potential winners and losers the OCC/FDIC CRA modernization proposal. Spoiler alert: The OCC/FDIC plan was subject to a lot of criticism.
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