On October 31, 2012, the CFPB issued its first issue of Supervisory Highlights: Fall 2012, a newsletter to the public and the financial services industry about its examination program, including the concerns that it finds during the course of its completed work, and the remedies that it has obtained for consumers who have suffered financial or other harm.
It is written as an Executive Summary, and it will not refer to any specific institution. But it will "signal to all institutions the kinds of activities that should be carefully scrutinized for compliance with the law."
According to the CFPB, it has already taken non-public supervisory actions against financial institutions participating in the credit card, credit reporting, and mortgage markets, confirming "remedial relief" to 1.4 million consumers, and causing the affected financial institutions to correct illegal practices. Importantly, and in consequence to the CFPB's examinations and actions, financial institutions were required to adopt effective policies and procedures to ensure that violations do not recur and, especially, mandating that they implement robust Compliance Management Systems (CMS).
The CFPB maintains that an effective CMS is a "critical component of a well-run financial institution."
After a brief discussion about the CMS concept, I should like to outline these three significant findings derived from the CFPB's examinations:
- Comprehensive CMS Deficiencies Found Through CFPB Supervisory Activities
- Deficiencies Related to Failure to Oversee Affiliate and Third-party Service Providers
- Deficient Fair Lending Compliance Programs
IN THIS ARTICLE
Compliance Management Systems
Comprehensive CMS Deficiencies
Failure to Oversee Affiliate and Third-party Service Providers
Deficient Fair Lending Compliance Programs