The Consumer Financial Protection Bureau (CFPB) continues to launch supervisory
examinations and enforcement investigations despite speculation and uncertainty
surrounding its practices. Regardless of possible turmoil within the agency,
it is important for corporations to prepare for inspections properly.
At a minimum, the CFPB may conduct an onsite observation that lasts a few
weeks. Some reviews can extend to years, as the CFPB thoroughly probes
through corporate finances to analyze information provided to the public,
complaints, and past and present products and services offered by the
company. All of these factors impact the CFPB’s final decision and
may help a corporation identify risks that require adjustments moving
forward. Firms that are likely to be affected need strategies for responding
to examination requests and demands from the Bureau. Such is the reason
for establishing accountability regarding policy decisions and proper
evaluation of material.
One of the best ways that a company can prepare for CFPB scrutiny is by
ensuring that all stakeholders are on the same page. As many may know,
conformity to rules and regulations begins at the top of a company and
works its way down the chain of command. Creating a committee dedicated
to compliance is the best way to establish and cultivate a culture in
which CFPB investigations are held in check instead of abhorred.
Another way for a company to be ready for an unannounced Bureau visit is
to have a clear outlook on data management and a designated person who
manages investigations. The ambassador should be an expert on technological
systems used to store data within the company. He or she should also understand
the many aspects of the business to avoid blunders when questioned by
representatives of the CFPB. It is ideal to appoint a leader from either
the company’s legal or compliance departments, as such an individual
typically has the experience and wherewithal needed to provide accurate
and succinct answers to inquiries.
Even with one person designated as ambassador, it is important that companies
establish boundaries with all staff members. One of the keys to success
for any CFPB investigation lies in maintaining control of the information
shared. The last thing that a corporation needs is a staff member volunteering
erroneous information that could be incriminating. Keeping all workers
abreast of the basics surrounding an investigation is the best way to
prevent careless activity.
Having a full grasp of the legal aspects about any CFPB analysis is an
essential to triumph in investigations. The company’s legal team
should be aware of specific laws that may exonerate the business if the
CFPB happens to discover violations. Exam appeals, remediation, and swift
responses are all factors that a legal team should be well-versed in before,
during, and after a CFPB investigation.
Understanding client-attorney privileges and its limits before audit requests
can help corporations better select which documents are privy to observation
and which should not be made available for analysis. Taking continual
steps to be prepared for a CFPB investigation is the only way for corporations
to survive the intrusive prowling of the agency. Companies most capable
of managing scrutiny are those that invest significant time and resources
into establishing compliance teams that ensure all applicable laws are followed.