Successfully Growing Your Assets and Coming Under CFPB Supervision?

September 17, 2019

Now is the time to assess your Compliance Management System (CMS) effectiveness and exam readiness.

As a financial institution approaching $10 billion in revenue, you should be laser focused on compliance examination readiness. How do you know you’re prepared for an exam?  Across the industry, we are working with leaders like you to:

  • Confidently comply with new and existing federal regulations from each reviewing agency
  • Respond to increasingly active State Attorneys General and examination teams
  • Leverage technology and process improvement for increased efficiency and effectiveness
  • Heed the calls of federal regulators and legislators to:
    • Reach the under- and un-banked through prudent small-dollar and short-term lending
    • Provide service to diverse communities
    • Partner with fintechs to accelerate technological advancement in banking


Putting together a business case to be compliance exam-ready is time well-spent!

CMS effectiveness and exam readiness helps you:

  1. Ensure awareness into the consistency across your entities and LOBs
  2. Abide by the heightened standards and expectations that come with CFPB oversight
  3. Respond to increasingly aggressive State Attorneys General and examination teams, rapidly becoming “mini-CFPBs”
  4. Confidently comply with federal regulations
  5. Mitigate other critical risks such as those presented by the increased use of third parties

Find the time to worry about exam readiness because:

  1. Exam preparation and execution are time consuming, so investing time up front with the organization can pay huge dividends
  2. Findings are a distraction and drain on resources to effectively manage your business
  3. Preparation, findings and fines detract from critical merger activities:
    1. Business integration and optimization
    2. Cost and other resource reduction
    3. Revenue and portfolio growth

How to gauge your compliance management systems’ effectiveness

The CMS should ensure awareness of compliance responsibilities for the financial institution; provide formal documentation to set expectations; and use a robust testing environment to monitor adherence and support remediation.

Conduct a Risk Assessment to understand how much more needs to be done at the $10B milestone

  • Do you have a clear line of sight into how products, services and associated processes are integrated into the overall framework of the product lifecycle?
  • Have you identified applicable rules and regulations?
  • Have you assessed associated risks and controls?

Use Ongoing Prevention to maintain readiness

  • Do your policies and procedures address regulatory requirements and business practices to fulfill them?
  • Do you have training in place to ensure that employees understand what’s expected?

Leverage Detection and Correction to mitigate risks

  • Do you have testing, monitoring and reporting in place to ensure that what’s expected is actually being done?
  • When exceptions are identified, are they communicated, analyzed and remediated to the root cause efficiently?
  • Do you have regulatory and business change management disciplines in place?

Use Governance as the barometer for sustainable compliance

  • Is the risk culture genuine? What is the evidence you can point to in order to support the answer being,” yes?”
  • Have you defined formal roles, responsibilities and accountability? (Within CMS, do you have clear 3 lines of defense?)
  • Are you maintaining open and constant communication across the lines of defense to address issues, risks and drive collaborative change to improve?

Be confident in your CMS as you reach $10 billion

Our experienced team can quickly and efficiently assess your CMS to give you confidence in your readiness as you approach the $10 billion milestone.

We work with financial institutions just like yours that are on a trajectory to (or have recently) come under CFPB supervision. We help these financial institutions assess their CFPB exam readiness and the strength of their current Compliance Management Systems. Our assessments result in a prioritized list of high-value enhancements along with a risk-based implementation plan.

Contact us today to discuss how we can help shore up your CMS.