Well, it looks like we received some great direction at a recent District of Columbia Bar meeting from one of the top people at the CFPB! According to a report from Ballard and Spahr the presentation was regarding CFPB enforcement priorities, and the only speaker was Hunter Wiggins, who is the Deputy Enforcement Director of Policy and Strategy of the CFPB Supervision, Enforcement & Fair Lending Division. Geez, I would hate to have put that on my business card or tell someone when they asked my title!
Anyway, they asked Mr. Wiggins to outline the structure of the enforcement policy and strategy group and give some insight into the factors for directing this enforcement.
While the direction is at a “very high level”, we can at least determine a bit more direction, which I believe we all greatly appreciate!
Mr. Wiggin’s Top 7 Factors Are:
- The number of “victims” or size of harm.
- Duration of harm to the consumer.
- Whether the activity targeted vulnerable customers.
- Whether consumers had the ability to effectively shop for better products.
- Whether the activity resulted in any market distortions.
- Whether there are existing regulatory hurdles to regulatory enforcement of the activity.
- Did market conditions encourage harmful activity by industry participants?
Additionally, Mr. Wiggins went on to say that about half of his group’s effort focuses on the core enforcement areas such as Fair Lending, Credit cards and Mortgages (uh oh, that’s us). The remaining time is spent on priorities that currently exist or are showing trends of potential harm to the consumer.
So what can we take away from this?
•Reverse your business methodology from making decisions at the production level first. This means engaging your compliance leads in any new products, policies, practices, contracts, or marketing. Once the executives have battled it out and the company understands the risk, decisions can then be made that will keep you off the “Mr. Wiggin’s Top 7 Factors” list.
•Carefully exam and thoroughly understand your market. That means each and every MSA where you do business.
•Define in writing policies, procedures, exceptions, workflows and relate each of them to the citing in the regulation that makes it legal. I’m sure that most of you keep this information in PDF format and if you think back to the college days, you had to include your references. Do this to make it easier on everyone, including you at exam time.
•And by all means keep your business clean. If you would not sell it to your mother, don’t sell it to the consumer!