Remember that initially having clean data
avoids substantive cost later, such as staff time for
re-filing and the examiner’s loss of confidence in
the organization’s data management capacity.
other reference data such as violation, complaint, and supervisory trends). Examples of
agency sources include the Federal Reserve
Annual Report to Congress at www.feder-alreserve.gov/publications/annual-report/
default.htm, the OCC Semiannual Risk
Perspective: From the National Risk Committee at www.occ.gov/publications/publi-cations-by-type/other-publications-reports/
semiannual-risk-perspective/semiannual-
risk-perspective-fall-2012.pdf, and the FDIC
Supervisory Insights at www.fdic.gov/regula-tions/examinations/supervisory/insights/
siwin12/ index.html.
driving 2013 Expectations: Examiners
increasingly are incorporating a substantive assessment of how data is used to monitor risk
and how it is used to keep the bank’s senior
management and board sufficiently apprised of
compliance risk trends and developments.
ffiec.gov/press/Doc/FFIEC%20social%20me-
dia%20guidelines%20FR%20Notice.pdf
■ ■ mobile Banking: Mobile Payments: An
Evolving Landscape, an FDIC Supervisory
Insights article at www.fdic.gov/regulations/
examinations/supervisory/insights/siwin12/
mobile.html
driving 2013 Expectations: Examiner
feedback suggested weaknesses in testing process-
es despite the improved ratings profile. This feed-
back is supported by recent enforcement cases,
which required modifying testing programs.
intensified testing
Re-evaluate your testing program to ensure
scoping and review protocols enable the bank
to sufficiently identify exposures related to
existing and emerging risks. Unfortunately, the
prior era of good banking conditions allowed
curtailing of testing protocols. Weaknesses
disclosed during the subsequent financial crisis
and the fast pace of innovations in products
and service delivery necessitated a return to
more intense reviews and the inclusion of areas
typically viewed to have limited compliance application, such as collection and recovery functions. In addition, the incidents of new rules
and associated complexities require substantive
staff guidance, such as testing scripts, to facilitate the reviews. To this end, compliance professionals leverage examination procedures and
guidance documents, especially those that pertain to high-risk and emerging issues such as:
■ ■ debt collection: The CFPB debt collection examination procedures at http://files.
consumerfinance.gov/f/201210_cfpb_debt-
collection-examination-procedures.pdf
■ ■ social media: The “Social Media: Consumer Compliance Risk Management”
Federal Financial Institutions Examination
Council (FFIEC) proposed guidance at www.
Maximize resources, talent, and the
Perspective of others
Leverage internal and external relationships to
maximize your institution’s compliance in an
environment where federal and state agencies are
increasing coordination to enhance the enforcement of consumer protection laws. Relationships
that strengthened compliance for financial institutions include:
■ ■ Partnering with professionals in functional
areas bolsters the bank’s capacity to assess
practical implications of regulatory changes.
It also allows the opportunity to build institutional compliance depth by developing
staff with integrated compliance and operational skill.
■ ■ Establishing a peer network promotes ongoing dialogues that help identify and assess
emerging issues, allow shared experiences to
assist in examination planning and management, and vet the compliance implications
of new products and services or regulatory
changes.
■ ■ Maintaining an open dialogue with examiners and other agency representatives builds
trust and allows informal information
exchange and the opportunity to become
familiar with the regulators’ perspective
on issues, industry developments, and best
practices.
priority, which is to strengthen the agencies’ capacity to identify exposures and enforce consumer
protections through effective coordination. In
fact, the CFPB has devoted a great deal of effort
in fortifying its coordination framework with
federal and state agencies through its most recent
actions in December 2012 consisting of:
■ ■ An MOU for coordination with the Department of Justice (DOJ) regarding fair lending
enforcement and related information sharing. The December issuance supplements an
earlier version in 2012. The new MOU generally aligns the CFPB and the DOJ with the
prudential banking agencies on fair lending:
www.justice.gov/crt/about/hce/documents/
fair_lending_mou_12-6-12.pdf.
■ ■ An information-sharing agreement with the
city of Chicago to combat fraud and predatory practices involving pay-day lenders and
other financial institutions: www.ci
tyofchi-cago.org/content/dam/city/depts/mayor/
Press%20Room/Press%20Releases/2012/
December/12.5.12FinancialFraud.pdf.
■ ■ A statement of intent that outlines the CFPB’s
proposed best practices about sharing information with state banking and financial
services regulators. The statement of intent is
a revision to the existing MOU from January
2011. Among other information, the CFPB
plans on sharing consumer complaints it
receives from the states: http://files.consum-
erfinance.gov/f/201212_cfpb_statement_of_
Intent_for_sharing_information_with_sbfsr.
pdf.
The rest of 2013 will be a substantive, busy,
and challenging year for everyone. Thanks to
your efforts, we started off the year motivated
by improved compliance performance. I have
no doubt we can keep it going. Just remember,
use the data to control your institution’s destiny.
Test rigorously along the way and keep those
relationships. ■
driving 2013 expectations
Coordination between banking agencies will be
a priority to address industry concerns about
confusion and duplication in the oversight process. However, don’t lose sight of the overarching
ABOUT THE AUTHOR
BONITA G. JONES, president of San Francisco-based Bonita Jones & Associates, LLC, is a retired principal in the Banking Supervision and Regulation Division of the Federal
Reserve Bank of San Francisco. Reach her by e-mail
at bonitajon@aol.com or by telephone at (415) 297-
1784.
