and then reassessed in the context of the initial
analysis and associated assumptions. Also consider adding additional information relating to
any dependencies, such as third-party vendor
timelines for software updates.
While not an exhaustive list, here are some
data points to consider when tracking regulatory change:
■ ■ ■ Applicable regulation
■ ■ ■ Area of responsibility
■ ■ ■ Status (i.e., proposed, in process, testing,
complete)
■ ■ ■ Timing, such as implementation deadlines
and effective date
■ ■ ■ Dependencies
■ ■ ■ Detailed Project Management, including designated milestones
■ ■ ■ Potential customer impact
■ ■ ■ Potential impact on systems and controls
Validating Changes
Validating change is often overlooked, but it is
a critical part of a successful change manage-
ment program. It is risky to assume that change
has been implemented properly, and proactive
validation can help to avoid spending more
time on corrections and potential remediation
in the future.
At a minimum, use test environments and
then immediately test live output. For example,
changes made to the Loan Origination System
(LOS) or other core systems should be validated
in a “test” environment prior to full implementation. Next, validate all permutations of system
changes, such as various calculations or loan
disclosures, upon implementation. Thereafter,
apply enhanced quality control (QC) process
for a period of time after implementation, and
monitor complaint data closely as an indicator
that system changes are working as intended.
Final Thoughts
Chaos stresses systems—and most people. Rap-
idly advancing technology and a steady stream
of change in the regulatory landscape can make
it seem like chaos is inevitable. Proactive plan-
ning with structured systems and processes
as part of a Regulatory Change Management
Program can help to create order. And while
you can’t get rid of chaos, you can at least drive
more predictable results going forward. ■
ABOUT THE AUTHOR
BRITT FAIRCLOTH, CRCM, is a senior regulatory consultant for Wolters Kluwer U.S. Advisory
Services, where she focuses on CRA, HMDA, fair
lending and redlining data analytics for institutions
of all sizes, including CRA and fair lending market
analysis, fair lending risk reviews, and integrated
redlining reviews. In this role, Faircloth brings
over 20 years of relevant banking and regulatory
compliance experience to assist institutions in performing fair lending risk assessments, UDAAP risk
assessments, CRA self-assessments, compliance
management system (CMS) reviews, complaint
management program reviews, third party vendor
program reviews, and other types of quantitative
and qualitative data analytics. She can be reached
at britt.faircloth@wolterskluwer.com.
