Remediation
Finding issues and reporting them are not
enough. It is expected that a bank “implements
measures designed to prevent the violations
from recurring” and maybe even “appropriately
recompense those adversely affected.” Was the
conduct immediately stopped? Were there consequences imposed on responsible individuals?
Were policies and procedures changed?
These things take time, resources, and money, and often action plans can’t be formulated,
executed, and fully completed by the time an
exam takes place. But the more important
concept is that these actions are well under-way, and that the bank demonstrates the end
result will be to prevent future occurrences,
while making things right with those that were
harmed.
Cooperation
The bureau makes clear that simply following what is required by any particular law or
regulation isn’t enough. That much is standard
practice and expected. What provides goodwill
here is “substantial and material steps above
and beyond what the law requires.” Cooperation should be prompt and complete, and information should be readily provided.
While this guidance applies to CFPB-supervised entities, its concepts would likely be
viewed similarly by the other agencies, as well.
But the prevailing idea is clear: Appropriate
proactive compliance controls that are not kept
hidden from regulators, even if in-process and
not completed, are viewed favorably when it
comes to having an effective compliance management system. ■
ABOUT THE AUTHOR
CARL G. PRY, CRCM, CRP, is a senior
director for Treliant Risk Advisors in
Washington, D.C., where he advises
clients on a wide variety of
compliance, fair lending, corporate
treasury, and risk management issues. Over the
last 18 years, Pry has held senior leadership
positions including senior vice president and
compliance manager for the Compliance and
Control Department at KeyBank in Cleveland,
Ohio; vice president of regulatory services at
Kirchman Corp. in Orlando, Fla.; and manager in
the Finance and Performance Management Service
Line at Accenture in Chicago, Ill. He also serves on
the ABA Bank Compliance editorial advisory board.
Reach him via email at cpry@treliant.com or by
telephone at (440) 320-4662. s h u t
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