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Taking The Fear Out of The CFPB Exam-Checklists

If you just joined the group, you may not know that I am a checklist freakoid.  It has been my experience in loan production, processing, underwriting, locking, closing, and auditing that quality improves when they are in place.  Guess who else likes checklists?  That’s right the CFPB.  Conclusion-If the CFPB thinks that checklists serve to establish proper workflow and quality control, it might be a good idea to adopt that practice.

Think about it this way:

  1. Humans have good days and bad and no matter how good we are we will miss something.
  2. Document your work process and flow by showing the examiner the quality control process.
  3. They serve as file notations, whether that employee is still employed, sick or gone.
  4. They serve to define the training opportunities.
  5. They serve as a training device.  How many times have you had another employee show the new person “the ropes” only to find out later that they missed something?
  6. You can set employee performance incentives and have the data to show it.
  7. They keep everyone on task.
  8. They take away time, versus’ adding time to the process.  This maximizes your efficiencies.
  9. You don’t have to listen to “I didn’t know”.
  10. Finally, it helps you identify your stars and your slackers.

So, as you can imagine I am going to suggest you build checklists throughout your entire workflow model.  When you first introduce them, heads will explode and you will hear things like “this is stupid” or “I don’t have time for this”.  Yet when you get over that hump, you will be quite surprised by how happy everyone is.  It actually kind of reminds me of when I was raising teenagers!

To start the process, take each position in your organization and define every task they have to perform and when.  You can do manual checklists or electronic checklists.  Certainly if you are doing them electronically it is easier to aggregate and study the data they produce.

Next, decide where each task needs to go in the workflow and most importantly who needs to do it.  If the checklist is not complete the file cannot move to the next person. We have been doing this for years in underwriting; it is just time to expand it into the entire workflow.

Set quality and performance standards around people doing their job timely, and with quality and offer incentives based on these metrics versus volume.  With the new compensation regulations, your customers and the CFPB will applaud that effort.

If you are trying to get started with this process, here are two tips.  First, use the CFPB examination manual and checklists and the ones I developed as a jumping off point.  Second, break those down into your workflow and develop checklists for any gaps.

Once you have that worked out, you will need to set up the monitoring process.  Putting your checks and balances in place means bigger checks for the company and a positive balance sheet!  And that equals a job well done and possibly a bonus for you!

Tammy Butler, Master CMB

Author Tammy Butler, Master CMB

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