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Compliance

CFPB in 2017

Steve Roennau Vice President Compliance EFG Companies
Contributing Author:
Steve Roennau
Vice President
Compliance
EFG Companies

In January of this year, President Trump issued an Executive Order which required agencies like the Consumer Financial Protection Bureau (CFPB) to re-address how they issue new regulations. The order required agencies to eliminate two regulations each time they issue a new one. Because of this, we saw very little activity coming out of the bureau on issuing new regulations.

In addition, criticism of the CFPB reached a tipping point, forcing politicians to take a hard look at the powers granted the bureau. A good example of this is the Arbitration Rule that the CFPB tried to force through Congress in the third quarter. While the rule initially passed Congress, it was nullified by President Trump in November.

The latest news surrounding the bureau focuses on the change of leadership, as Richard Cordray stepped down from the position of Director. With the CFPB embroiled in internal politics, we can expect another year of limited activity. However, it is no longer a fiscally sound or viable idea to return to the auto lending practices of yesterday.

Regardless of any legislative changes, compliance will continue to be in the spotlight in the coming years. Whether or not the CFPB functions under more strict parameters, we can expect a heightened level of oversight from the Department of Justice, the Federal Trade Commission, and consumer advocacy groups.

For this reason, it’s important that you foster a collaborative compliance platform for your dealer partners. Ask yourself:

When discussing compliance with a dealer, do I ask about their compliance goals and best practices? Or, is the discussion more of a lecture on how I expect dealers to comply with my compliance goals?

The path forward in compliance is by cultivating a dialogue with dealers on how to work together towards shared compliance goals.