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The Reality of the Consumer Compliance Quandary

2 min read
Mar 11, 2011

Managing consumer compliance is challenging. In today's regulatory environment, the reality is that managing consumer compliance is a quandary. Here's why.

Community Bank Compliance is Tough

Community bank compliance officers are in a quandary.  Many of them report that they know regulatory change is coming and they realize the need to be prepared… but it isn’t clear what they need to be prepared for. 

Many of our community bank clients have reported a renewed emphasis on Fair Lending, the Community Reinvestment Act, HMDA, and other lending compliance initiatives, and we know this scrutiny of the loan portfolio will continue. But Dodd-Frank and other regulatory changes are on the horizon. 

A survey by Thomson Reuters that was published last week indicated that one third of compliance teams charged with governance, risk and compliance are already spending more than one whole day every week tracking and analyzing regulatory developments. 

One day a week or 20% of the time spent staying abreast of the laws and potential changes sounds about right to me.  The survey stated that another 15% spend more than one man day per week creating and amending compliance reports for their boards to keep them abreast of compliance activities, changes and other compliance related information. 

So, one day a week analyzing changes and one day a week reporting on compliance constitutes roughly 40% of the compliance department’s time consumed with analysis and reporting before any risk management, mitigation, or governance is addressed. 

The Thomson Survey goes on to say that since most new regulations are slated to go into effect in 2012, and that 2011 is a year of consultations and planning for change.   Here we are with less than 6 months before we know the details, and within another six months we have to be prepared to comply for what everyone in the industry believes will be monumental change. 

So, this is the world we live in.  We all know that we are on the cusp of certain change, but uncertain how this change will play out. 

The best preparation, under the circumstances, is to be proactive in understanding what may be, honest in assessing our own strengths and weaknesses, and nimble in adapting to what eventually comes to fruition.  Partnership, trusted outsourcing, collaboration, and fresh thinking are definitely required. 

TRUPOINT Partners helps community banks, savings institutions, and mortgage lenders address fair lending, CRA, and other lending compliance issues.  Our Fair Lending Self Assessment Review is used by hundreds of institutions to help them better manage compliance risk.  Please let us know if we can help. 

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