February 2, 2021

Are You Ready for Your Next CFPB Visit?

I know, I know. The article's title alone might raise the hair on the back of your neck. I work in Servicing and Operations in the financial services industry and year after year I'm reminded how burdensome compliance checks can be.

Compliance checks with the CFPB

But it’s an important question. Are you really ready for your next visit from the Consumer Finance Protection Bureau (CFPB)? Whether it’s a resounding “yes,” a nervous “maybe,” or an adamant “no” — there are certain steps you can take to prepare your organization and team.

Being prepared doesn’t guarantee a successful review. But it does provide focus and guarantee a better interaction with the CFPB examiners, which will enhance any review in my opinion. If you read my last article you know that the tide is turning and, sooner or later, the CFPB will be knocking on your doorstep.

So, what should you do? Prepare now. Yes, even before a review is scheduled.

Three ways to be prepared for your next CFPB review:

Create well-defined and documented roles

When preparing and working with the CFPB, both the CFPB and your organization should know who is responsible for every aspect of the review (prior to, during, and post-review). This is vital because there’s limited time to coordinate before and during the visit. During the review, one requirement is to have a “go-to person” that the CFPB knows is the primary contact they can go to at any time. All requests should flow through this person. This improves consistency in communication and minimizes disruption to other members of the team.

Develop an intake process for requests and follow up questions

Prior to the review, the CFPB will send a request list. Your organization needs to have a process in place to quickly organize, distribute, delegate, and collect the requested materials. Based on your organization’s risk process, these materials should also be reviewed by the Compliance or Legal areas prior to submitting to the CFPB. Gathering and approving documents requires a focused effort in a short period of time. It’s imperative you don’t miss CFPB deadlines as it gives a poor impression and raises concerns early on. This intake process should continue throughout the entire review in order to handle all additional ad-hoc requests.

Communicate the scope and timing of the review to all staff members

The CFPB will talk to team members, ask to observe individual processes, and listen to calls with representatives. Your team should understand the importance and purpose of the review and how they should conduct themselves with the CFPB examiners. Many organizations get into difficult situations when nervous staff members give inaccurate information. Instead, train your team to seek help from management before guessing at the questions.

CFPB’s Key Areas of Focus

  1. All verbal communication with customers. The CFPB will ask to listen to many recorded calls and may even ask to sit side-by-side with live representatives. Focus on basic customer service issues like the speed of answer, following all regulatory requirements, response times to customers, escalation procedures, and ability to answer questions accurately. This includes: (a) inbound calls to call centers and (b) outbound calls from collection centers and any other contact areas.
  2. All written communication with customers. The CFPB will ask to review outbound letters for content, to check compliance with state and regulatory rules, speed of response to inbound written requests, and proper escalation for inbound and outbound correspondence. This includes: (a) inbound letters from customers and (b) outbound correspondence to customers (letters and forms).
  3. Tracking of customer complaints. The CFPB will want to review all inbound and outbound tracking reports and the process for analyzing customer complaints. Your organization will need to demonstrate that senior management is reviewing these reports and looking for repetitive problems. For repetitive issues, your organization will need to show that they’ve either already addressed the issues, or built action plans to mitigate them.
  4. Credit Bureau reporting issues. Realizing that improper credit bureau reporting can negatively impact consumers, the CFPB will evaluate your organization’s monthly processes for reporting accounts to the credit bureaus. Additionally, they will want to review and test the dispute resolution process, including the research process and the proper timing on responses to customers.
  5. Vendor management. Every organization utilizes vendors or partners to operate its business. The CFPB will evaluate how your organization monitors and manages those vendors, especially when the vendors have direct contact with your customers. Your organization needs to ensure that your vendors remain in compliance with regulatory issues and treat consumers within the rules dictated by the CFPB.
  6. Requirements for adequate staffing. Management must be able to demonstrate that adequate staffing is in place to handle all operational functions specifically related to the customer. For instance, are there enough call center representatives to handle calls in a timely manner, enough payment processors to process payments timely, etc. The CFPB will ask to review staffing models, their frequency of update, and how they are validated.
  7. Servicing transfers. As banks and mortgage companies transfer servicing to other banks or third-party vendors, the CFPB will want to review the transfer process to make sure the customer has not been impacted negatively, especially with regard to payment processing, collections calls, and credit bureau reporting.

If you feel overwhelmed, don’t.

I completely understand how frustrating it is to spend time and energy preparing and responding to compliance checks when you really want to be innovating for your customers and driving growth. I promise the return on investment will be leaps and bounds.

Plus, you can always phone a friend. I’ve spent many years managing compliance teams at bank and mortgage companies and SingleStone has numerous individuals with compliance expertise. If you’re wondering how we’ve helped organizations prepare and save big in the long run, just ask me. Here's a glimpse of how we can partner to get your organization ready:

  • We can help assess your organization’s readiness prior to an examination, including the development of a gap analysis showing where your organization should immediately focus.
  • Then, we develop a strategic roadmap for your organization to know where to first focus on making operational changes to prepare for the CFPB.
  • Next, we execute the operational changes needed through the management of workstreams required to get your organization ready.
  • We also serve as a strategic advisor throughout the evaluation and create a strategy for any future examinations.
  • If needed, we develop and document a repeatable program for managing the examination process, including the intake and response processes.
  • And, while assisting you with CFPB compliance, we also explore additional means to enhance your customers’ experience and improve internal efficiencies.

I urge you to be proactive and start preparing for the upcoming visit as soon as possible. If you feel hesitant or apprehensive about your next check, give me a call or shoot me a message. I’d be happy to hear what’s keeping you up at night and see how SingleStone can help you rest easy.


Keith Hauser

Account Director
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