FORT WORTH — The Consumer Financial Protection Bureau “will eventually look at what you’re doing, so you had better look first,” Dan Bickmore, senior vice president and chief compliance officer at General Motors Financial Co. told attendees at the Auto Finance Risk & Compliance Summit yesterday.
That is “pretty much reason enough,” to make sure a company’s compliance management system identifies risk, yields information, and remediates, he said.
“In addition, I think we all have to pretty much believe in what we’re doing,” Bickmore said. “You’ve got to believe in the process you create through your own system.”
The risk that regulators are concerned with, he clarified, is risk to the consumer, or more specifically the potential that the consumer can suffer economic loss or “some other cognizable, legal loss.”
The Federal Financial Institution’s exam council, which includes the CFPB, also proposed a new uniform interagency compliance rating system on Wednesday.
“Now that doesn’t sound exciting, but one of the reason that the council came up with the new rating system was to recognize that examination systems are not done like they used to be,” Bickmore told the audience. “They were essentially transaction based. Now they are very much trying to be, and are, risk based. This whole theme of trying to examine institutions and understand what risks are in that institution, is key to any federal regulatory examination.”
Some of the main elements to examinations in the council’s new system are: the identification and management of risk arising from the institution’s products, services, and activities; the institution’s CMS and whether the institution’s policies and procedures are appropriate to risk; and the degree to which training is appropriate to risk.
“Clearly this theme of regulation based on risk is key to the regulator’s approach,” Bickmore said. “But it also should be key to our own approach on how we look at things in our organization.”