Compliance Management System


On May 22, 2014, the Consumer Financial Protection Bureau (“CFPB”) issued its Spring 2014 Supervisory Highlights Report, which includes a review of recent rulemaking, guidance, and enforcement activity.  The CFPB uses its fourth edition since the agency’s founding to reiterate the importance of robust compliance management systems. 

The report notes that a well-developed compliance management system (“CMS”) establishes an entity’s compliance responsibilities; ensures those responsibilities are communicated to employees; ensures that responsibilities for meeting legal requirements and internal policies are incorporated into business process; requires reviews of operations to ensure responsibilities are carried out and legal requirements are met; and requires corrective action when necessary, including updates to tools, systems, training, and materials.  While the CFPB does not require a particular CMS structure, the CFPB reasons that an effective CMS commonly has four interdependent control components: (1) board of directors and management oversight; (2) a compliance program; (3) consumer complaint management program; and (4) an independent compliance audit.  “When all of these control components are strong and well-coordinated, a supervised entity is likely to be more successful at managing its compliance responsibilities and risks.”

Some interesting highlights from the Spring 2014 Report include:

-    CFPB Supervision found that board of directors and senior management at some consumer reporting agencies (“CRAs”) exercise insufficient oversight of the entity’s CMS, with at least one of the CRAs lacking a chief compliance officer or an official with comparable responsibility for company-wide compliance oversight.

-    CFPB examinations found that some CRAs fail to exercise adequate oversight of their business relationships with third-party service providers and that one or more of the CRAs failed to monitor and track consumer complaints altogether.

-    CFPB Supervision observed significant weaknesses in the CMS of several debt collectors.  For example, CFPB Supervision determined that at least one entity had inadequate written CMS policies and procedures and lacked sufficient board and management oversight of CMS.

-    For one debt collector, CFPB Supervision determined that the entity made approximately 17,000 calls to consumers outside the appropriate calling hours set forth in the FDCPA, in addition, the entity also violated the FDCPA when it repeatedly contacted more than one thousand consumers, contacting some consumers as often as 20 times within two days. 

-    CFPB Supervision has cited multiple lenders for unfair, deceptive, or abusive acts or practices, or risks of these acts or practices, for their policies of: repeatedly making unnecessary calls to third parties; improperly disclosing personal debt information; calling borrowers in violation of do-not-call requests; and making false claims during collection calls.

-    The CFPB’s nonpublic supervisory actions have “resulted in more than $70 million in remediation to over 775,000 consumers.”

As with previous Supervisory Highlight Reports, the 2014 spring edition provides insight into the CFPB’s supervisory and enforcement priorities.  For more information on the CFPB and its supervisory role, please contact Katherine Olson of Messer Strickler, Ltd. at 312-334-3444 or   

How to Survive a CFPB Audit: Upcoming Webinar by Nicole Strickler

Is your organization ready for the Consumer Financial Protection Bureau (“CFPB”) audit?  Does your Compliance Management System comply with the new CFPB exam requirements?  If you can’t confidently answer “yes” to these questions, we are here to help!

The CFPB has continued to develop and hone its audit process over the past year. Prepare your organization for the audit process before the CFPB knocks on your door. Messer Strickler, Ltd. partner Nicole Strickler has paired with InsideArm to help prepare you for your organization’s first CFPB audit.

On February 25th, 2014, Ms. Strickler will present a webinar entitled “How to Survive a CFPB Audit”, where she will provide you with step-by-step guidance on what to expect and how to prepare for your upcoming exam.  She will explain the CFPB’s policies and give real-life examples of how the CFPB measures accountability. 

To register for the webinar, please follow this link. You may also contact Ms. Strickler directly at (312) 334-3442 or by e-mail

Ms. Strickler is a partner at Messer Strickler, Ltd. Ms. Strickler concentrates her practice in the defense of corporations in civil matters but particularly focus on the defense of consumer litigation throughout the country. This includes representing clients in both individual and class actions involving state and federal consumer laws, including the Fair Debt Collection Practices Act, Fair Credit Reporting Act, Telephone Consumer Protection Act and the Illinois Collection Agency Act. Her clients include corporations, lending institutions, collection agencies, asset purchasers, lawyers as well as individuals. Ms. Strickler is an active member of ACA International, NARCA, NAPBS and the Consumer Financial Division of the American Bar Association, where she holds a liaison position for Compliance Management.