Financial banking regulators have long encouraged depository institutions to take steps to enhance corporate governance and internal controls and to address issues proactively. Recently, the Consumer Financial Protection Bureau (CFPB) issued guidance to its supervised financial institutions regarding conduct to protect consumers from possible violations of consumer protection laws and regulations.
Financial institutions are challenged to construct appropriate governance controls and processes to manage compliance-related deficiencies. The CFPB lacks clarity – in order to receive any affirmative credit in the context of an enforcement investigation, institutions are expected to go beyond what is applicable by law. In this article, we outline some methods to comprehensively demonstrate to regulators the nature of the issues encountered and their resolution.