Many thanks to Lisa Ledbetter of SNR Denton, who created this list and introduced it to us today, when she served on the “Preparing for a CFPB Exam” panel at the MBA Mortgage Regulatory Conference. She generously agreed to allow me to show it to all of you. Lisa has been heavily involved in CFPB exams with her clients, and she recommends that lenders take a pro-active stance by following her “Top 10 List”.
1. Your Board or equivalent, should adopt an effective compliance management system, with responsibilities assigned to a person who can communicate that system.
2. Compliance policies and procedures should be documented and most importantly followed. The CFPB will talk to your employees to see if the policies and procedures are understood and followed.
3. Board or equivalent, must receive compliance training and regular compliance updates.
4. The audit function for your compliance management system should be independent of the compliance, sales and service functions. In other words, your compliance manager should not audit the outcomes of your compliance department.
5. Types and patterns of consumer complaints should be evaluated and addressed. Look for trends and ways to correct those issues.
6. Identified complaint trends, based on company specific and industry data, should be evaluated and addressed.
7. Resolve all issues raised during exams and inspections by other regulators. They work together, so they will find out if you didn’t address a finding.
8. All of your service providers should be subject to an effective oversight program.
9. Create an examination plan. Be proactive, don’t wait and assign a central point of contact.
10. Perform a mock exam based on the guidelines issued by CFPB. Look for holes and plug them up.
If you do not have the exam guide for CFPB, please let me know and I will send it to you.