Last week, President Obama appointed Richard Cordray as the Director of the Consumer Financial Protection Bureau (CFPB). Upon his appointment, Cordray immediately initiated the CFPB’s nonbank supervision program, which regulates nonbank entities dealing in financial products. Some of the nonbank organizations targeted for supervision include mortgage lenders and servicers, payday lenders, consumer reporting agencies, debt collection companies, private student lenders and other firms that often compete with banks, but were previously outside federal oversight.
As part of the nonbank supervision program, the CFPB plans to conduct examinations as well as more formal investigations, if needed. Using the same Supervision and Examination Manual that is currently used for bank examinations, the CFPB will review nonbanks to ensure compliance with federal consumer financial laws, including the Truth in Lending Act, the Equal Credit Opportunity Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act, the S.A.F.E. Act, and the Homeowners Protection Act.
While no specific regulations are released yet, there are several things nonbank entities can do now to prepare for the changes ahead, including:
- Take time to review the Supervision and Examination Manual to make sure you understand how a CFPB examination is conducted and what examiners are looking for. Click here to access the Supervision and Examination Manual.
- Take advantage of the knowledge and expertise of industry compliance leaders, such as Wolters Kluwer Financial Services. With more than 40 years of compliance expertise and more than 400 compliance and risk management professionals on staff, we are at the forefront of compliance monitoring and product implementation.
- Use resources, like Wolters Kluwer Financial Services’ compliance checklist, to evaluate where your organization currently stands. This checklist will help you identify any areas of weakness and give you a good starting point for implementing solutions.
- Contact your Wolters Kluwer Financial Services’ account representative for support. Our team of experienced compliance professionals can assist you with a variety of compliance review services to help you manage your specific compliance objectives. These services include compliance risk assessments, compliance program review, regulatory training for staff and board members and compliance examination/audit assistance.
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Do you have any concerns or questions about how to comply with the CFPB guidelines? Let’s get the conversation started! Follow us on Twitter, LinkedIn or Facebook to find out what other nonbank organizations are doing to prepare for the upcoming changes.