How Corporations Can Prepare for CFPB Investigations

August 9, 2017 by David Basen

The Consumer Financial Protection Bureau (CFPB) continues to launch supervisory examinations and enforcement investigations despite speculation and uncertainty surrounding its practices. Regardless of possible turmoil within the agency, it is important for corporations to prepare for inspections properly.

At a minimum, the CFPB may conduct an onsite observation that lasts a few weeks. Some reviews can extend to years, as the CFPB thoroughly probes through corporate finances to analyze information provided to the public, complaints, and past and present products and services offered by the company. All of these factors impact the CFPB’s final decision and may help a corporation identify risks that require adjustments moving forward. Firms that are likely to be affected need strategies for responding to examination requests and demands from the Bureau. Such is the reason for establishing accountability regarding policy decisions and proper evaluation of material.

One of the best ways that a company can prepare for CFPB scrutiny is by ensuring that all stakeholders are on the same page. As many may know, conformity to rules and regulations begins at the top of a company and works its way down the chain of command. Creating a committee dedicated to compliance is the best way to establish and cultivate a culture in which CFPB investigations are held in check instead of abhorred.

Another way for a company to be ready for an unannounced Bureau visit is to have a clear outlook on data management and a designated person who manages investigations. The ambassador should be an expert on technological systems used to store data within the company. He or she should also understand the many aspects of the business to avoid blunders when questioned by representatives of the CFPB. It is ideal to appoint a leader from either the company’s legal or compliance departments, as such an individual typically has the experience and wherewithal needed to provide accurate and succinct answers to inquiries.

Even with one person designated as ambassador, it is important that companies establish boundaries with all staff members. One of the keys to success for any CFPB investigation lies in maintaining control of the information shared. The last thing that a corporation needs is a staff member volunteering erroneous information that could be incriminating. Keeping all workers abreast of the basics surrounding an investigation is the best way to prevent careless activity.

Having a full grasp of the legal aspects about any CFPB analysis is an essential to triumph in investigations. The company’s legal team should be aware of specific laws that may exonerate the business if the CFPB happens to discover violations. Exam appeals, remediation, and swift responses are all factors that a legal team should be well-versed in before, during, and after a CFPB investigation.

Understanding client-attorney privileges and its limits before audit requests can help corporations better select which documents are privy to observation and which should not be made available for analysis. Taking continual steps to be prepared for a CFPB investigation is the only way for corporations to survive the intrusive prowling of the agency. Companies most capable of managing scrutiny are those that invest significant time and resources into establishing compliance teams that ensure all applicable laws are followed