Regulatory compliance mandated by the Consumer Financial Protection Bureau (CFPB) has caused financial service providers to reevaluate their systems, identify areas that are lacking, and put measures into place to ensure fair treatment for their consumers. Positive changes have come from all the hard work and resources that have plagued businesses that have suffered a lot of negative public sentiment over the years. Proactive companies, those embracing change and conforming to compliance, are finding that it costs much less than getting hit with enormous fines, paying employee overtime to get up to speed with compliance, and of course the negative public sentiments toward their company.
Many highly-regulated industries however are “reactive” in their approach to regulatory compliance. They do not anticipate issues but rather wait for issues to arise and then “react” to them. This is short-sighted thinking and can be costly to a business. As mentioned above, the fines for non-compliance can be enormous and the scramble to catch up can be just as costly to a company. This is near-term thinking and not a focus on long-term goals which is disappointing to investors and discouraging to future company growth.
A proactive company is a forward-looking company and not only anticipates issues that might arise but has a clear direction and goals for future success. They have a compliance team that is open to change and forward thinking. By contrast a reactive organization fights an uphill battle, resistant to change, lacking or minimalizing proper training, and also likely to have very little management interest.
The CFPB is America’s watchdog and is focused on looking after Americans in the market for consumer financial products and services. It is a consolidation of various agencies previously responsible for federal consumer protection. Being directly funded by the Federal Reserve, it has even more power to impose fines and penalties for companies that react rather than prepare or comply to regulations. Regulations such as…
And more recent responsibilities such as…
- helping consumers obtain the information necessary to make informed and responsible financial decisions
- protecting consumers from harmful practices and discrimination
- eliminating outdated and unnecessary regulations
- consistently and evenhandedly enforcing federal consumer financial law to promote fair competition
- increasing market transparency
Donnell Systems, Inc. takes a proactive approach to regulatory compliance providing an enterprise-caliber tool set called OCIE® ECM. OCIE is a rock-solid information archive and collective for industries such as mortgage servicing, banking and financial institutions and healthcare. It holds all interactions between borrowers, lenders and vendors and provides a clear audit trail for litigation and compliance when needed.
Are you proactive and is CFPB compliance part of your mandate? Will your company be ready when auditors inquire?