With the announcement of Joe Biden as the President-Elect, many are wondering, what does that mean for the world of compliance in the financial services space?
Changes At The CFPB
One thing you can probably bet on is that there will be some leadership changes at the CFPB. Earlier this year, the Supreme Court handed down a ruling that allows the President to terminate the director of the bureau without cause. Therefore, it is likely that Director Kraninger will either resign or, based on the SCOTUS ruling, be replaced relatively early on in the new administration.
Increased Regulatory Scrutiny
You can also bet that regulatory rollbacks afforded by the Trump administration will be restored under the Biden administration and enforcement for non-compliance at the Federal level will increase significantly. Under the current administration, much of the oversight resulting in consumer relief has been enforced at the state level with the Feds exercising guidance over financial penalty.
Has "Less" Enforcement Been A Bad Thing?
Some would argue that the CFPB under Kraninger has been busy with enforcement, however, unlike her predecessor Richard Cordray, many financial firms have not had to pay penalties and in some instances only received guidance. Critics call this a "tap on the hand" with no consumer relief, but others would argue that the guidance was more than enough to get the point across.
For those with current matters before the CFPB, there seems to be a mad dash to resolve their cases before the new administration is sworn in, which may be a telling sign that there is increased awareness that guidance, in lieu of consumer relief could soon be a thing of the past.
COVID-19 Areas of Focus
The Biden administration has already outlined their five policy areas of focus, COVID-19 leading the priorities. With the economy closely tied to the pandemic, the financial services sector may see some new regulation imposed that will likely be consumer focused, including a new look at student loan debt, bank overdraft fees, housing discrimination, and payday loans, just to name a few. Mortgage servicers will also have eyes on them as it applies to COVID-19 relief for consumers with federally backed mortgages under the CARES Act.
Now’s The Time To Reevaluate Compliance Programs
It goes without saying that as a practice, compliance professionals should be ensuring that their compliance management programs are buttoned up. However, for those with work to do, there is no time like the present to review your compliance program and get your compliance house in order as 2021 is sure to be the beginning of a renewed focus on protecting the consumer.
Speak to one of our experts today to learn how PerformLine can help your organization be prepared for whatever regulatory changes happen next to mitigate your risk and protect your brand.