Consumer Financial Protection Bureau exams are typically dreaded across the industry, but Calvin Hagins, the Bureau’s deputy assistant director for originations, said lenders “should look forward to them,” during a panel discussion at the 2017 Auto Finance Risk & Compliance Summit.
The exams are an opportunity for the CFPB to learn about the industry, and lenders can use that time to teach the Bureau.
Hagins said what happens in real life is not always the same as what was written in a textbook. Therefore, CFPB and its staff would like to count on auto companies to inform them about what really happens.
“I typically ask the same set of questions: why, how, can you explain this to me?” he said. “Those seem like pretty fair and straightforward questions, right? And those are the kinds of questions you should be asking our examiners because you want to make sure to understand what the issue is we surface during the exam and whether or not it makes logical sense.”
Hagins said his objective in conducting a CFPB exam is to learn and apply the lessons he learned to the next exam. Ultimately, he wants to impart all the information he learns in the process through his staff as well as other administrators in Washington, DC.
“There shouldn’t be any surprises,” he said. “Examiners have periodic check-ins with the institution. Some [examiners] will have weekly or bi-weekly check-ins where they talk about the issues.”
When examiners raise concerns about certain “issues” during the exam, it does not necessarily mean “the issues” are negative, Hagins said. “It could be something that they need clarifications on,” he added.Like This Post