Compliance is an ever-changing, all-important aspect of the financial industry. At Allied Business Systems, we are happy to assist you in getting and remaining compliant. Until then, allow us to debunk several myths concerning compliance so you are not left in the dark.
Myth 1 – Compliance is a one-time task.
As the world evolves, compliance regulations will continue to shift whether at the Federal level or state level, new bills and guidelines will be introduced, and many will be signed into law. It’s important to stay updated on compliance regulations as they change and know how to adjust your approach to compliance to ensure you stay within the law.
Myth 2 – Only large businesses need to be compliant.
All businesses that perform financial transactions must be compliant. There are no minimum yearly earnings that would exclude you from compliance regulations. State auditors are required to review every licensee to ensure they are complying with the laws. While a larger company may incur a heftier fine due to more loans being out of compliance, a smaller company may feel the pain of the fine more. It is best practices that every company have a compliance officer that ensures their company stays in compliance.
Myth 3 – An audit program is adequate to catch all non-compliance.
The CFPB expects lenders to take a proactive approach to compliance in their business. This means not only having an audit program in place, but also a method for preventing and detecting potential non-compliance before harm has been done to a consumer. The CFPB examines your entire business related to how your company interacts with consumers.
Myth 4 – Policies and procedures have you covered.
The CFPB expects written policies and procedures to be in place that require companies to provide consumer financial products in accordance with federal consumer financial laws. They also expect companies to maintain effective systems and controls to manage their compliance responsibilities. The CFPB will focus on the policies and procedures as well as how the business interacts with consumers. The CFPB released a Supervision and Examination Manual, along with several guidance documents and bulletins that offer details on the different ways their examiners oversee companies.
Allied Business Systems Offers Premier Loan Origination & Management Software
Your loan origination and management software must be the very best to help your employees thrive! Getting and remaining compliant will protect the financial information that is handled by your software. Do you have questions about either? Let us help: 800-727-7534