"Nobody Gives the Compliance Officer a Christmas Present"
Contributed by Blair Rugh, Trinovus
Christmas is a great time of joy and goodwill. Loyal customers bring cookies that they have baked to the tellers and the customer service personnel. Borrowers bring bottles of wine and whiskey to their loan officers. But nobody brings presents to the compliance officer, not even a Christmas card. When was the last time a loan officer even thanked you for all the work that you do cleaning up the messes that they have made and for keeping them out of jail? But, if you change your frame of reference, things may be better than you think.
In Dodd-Frank, Congress gave compliance people the biggest present they could ever get. The Consumer Financial Protection Bureau and all of the other new regulations that it will spawn is the greatest job security anyone could hope for. In these times of high unemployment, there are virtually no unemployed financial institution compliance people. All of a sudden, compliance has been elevated to a new plateau. Hopefully, raises are soon to follow.
The FDIC recently did give one small present. A few weeks ago in this column I wrote that the FDIC had criticized senior deposit programs that were not based on age 62 that had a lower fee structure than the institution’s normal accounts, as the fact that a check might be paid into overdraft was a credit product and it was being provided to seniors in a discriminatory manner because of the lower fee on the deposit account. Apparently the FDIC has gotten a lot of heat on the issue, because they have issued a “Whoops”. They now say that they will not deem such programs to be illegally discriminatory. I would like to take credit for the change in heart, but I don’t know that is the case at all. The FDIC has not answered the open letter that I wrote.
Some good news is that the Consumer Financial Protection Bureau seems to be spending a great deal of its time reaching out to the distressed and oppressed rather than exercising its new regulatory authority. If you have a student loan or a credit card, if you are a veteran or a senior citizen, or if you feel that you have been illegally discriminated against, the CFPB is confident that you have been abused, and they want to hear your story and give you advice. The good or bad news, depending on how you look at it, probably not one consumer in 10,000 knows that there is a Consumer Financial Protection Bureau or that it has a website or that if you send it an email detailing your travails, some bleeding heart may come to your rescue. I wrote them an email telling them that at midnight on Black Friday I went to a local merchant and stood in line until the doors opened. I told the store personnel that I was a senior citizen and that I was not as fast or agile as the younger people and that I should be allowed to go to the front of the crowd or be given a head start. They wouldn’t let me do it. By the time I got to the electronics department, the item that I wanted to buy was sold out. Next year, I am going to lobby for special lines for seniors and for compliance officers who will be so busy with January 1, 2013 compliance dates. I hope the CFPB will help me and, of course, you the compliance officer.
The rest of their time, the CFPB has been working on wrapping a special gift for compliance officers. The CFPB is in the process of republishing the regulations implementing those laws with technical and conforming changes to reflect the transfer of authority and certain other changes made by the Dodd-Frank Act. In all its giving mood, it has elected to republish the week of Christmas. Despite its attempt to make no substantive changes, many of the republished regulations do have some ‘tweaks’ that are indeed substantive or at least appear to be so. For example, under Regulation V, where identity theft and address discrepancy regulations did not transfer to the CFPB, they are omitted from the CFPB’s version of Regulation V. Another example, the FCRA notices that currently reside under Regulation B ECOA, now have also found a home in the CFPB version of Regulation V.
Without additional guidance, the compliance officer must once again scramble through the holidays trying to decipher what is and what is not substantive. And, for those areas not under the guise of the CFPB, that seemingly have gone poof up the chimney along with Santa, where does one look come December 31, 2011?
Finally, the TriComply Services team wishes all of the readers of this column a very Merry Christmas and a great, great New Year. For those of you who are subscribers to our TriComply compliance service, a special thank you for placing your confidence in us and for giving us an opportunity to serve you. Like you, we have a lot on our plate. We are working hard at expanding our service and looking for ways that we can better serve you. And to all, a good night.