American Banker: “Consumer Harm” to Drive Compliance, Risk Program Changes

American Banker: “Consumer Harm” to Drive Complia...

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) spawned additional procedures concerning consumer protection. As witnessed by the establishment of the Bureau of Consumer Financial Protection (CFPB), a fundamental shift from “consumer compliance” to “consumer protection” provides increased power and influence to consumers and their complaints. In light of this new regulatory focus, banks must review and modify their compliance and risk management programs and their entire consumer products portfolio in order to meet these emerging requirements.

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The January 2012 American Banker article, “Consumer Harm” to Drive Compliance and Risk Program Changes discusses this new regulatory landscape which emphasizes consumer protection and highlights the principles of “fairness,” “clarity,” and “reasonableness.” This article—authored by Linda Gallagher, U.S. leader of KPMG’s Financial Services Regulatory practice, and Amy Matsuo, principal in KPMG’s Financial Services Regulatory practice— also explains that banks should prepare for upcoming CFPB exams by revisiting their current compliance risk assessments, servicing practices, and product life-cycle analysis to meet the new requirements and anticipate CFPB supervision plans.

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