<img src="https://ws.zoominfo.com/pixel/pIUYSip8PKsGpxhxzC1V" width="1" height="1" style="display: none;">

CFPB Offers New Category of Guidance with “Compliance Aids”

author Jordan Hicks
2 min read
Feb 5, 2020

The Consumer Financial Protection Bureau (CFPB) has historically provided an array of compliance resources including, compliance guides, instructional guides, executive summaries, factsheets, flow charts, checklists and FAQs.  

Now it’s introducing a new designation: Compliance Aids. 

What are Compliance Aids?

How is this different from previous guidance? 

What agencies are covered by Compliance Aids? 

What role will they play in supervision? 

What is the CFPB’s goal for Compliance Aids? 

What does this mean for Fair Lending risk? 

 

What are Compliance Aids? 

Compliance Aids are essentially guidance, which in our post on Laws Vs. Regulations Vs. Guidance, we defined as “supplemental material published by an agency that helps clarify existing rules.” 

Or, as the CFPB puts it, Compliance Aids are designed to “accurately summarize and illustrate the underlying rules and statutes” and “present the requirements of existing rules and statutes in a manner that is useful.” Compliance Aids aren’t rules, but might include “practical suggestions” for how it might be possible to comply with a rule or law.  

Compliance Aids don’t have the force of law and aren’t binding. They are merely tools to help give FIs insights into how they might effectively comply. They also won’t necessarily cover every situation. 

How is this different from previous guidance? 

It doesn’t change the status of previous guidance and supporting materials, though some might be reissued as Compliance Aids. 

What agencies are covered by Compliance Aids? 

Compliance Aids only apply to the policies of the CFPB, not other regulators.  

What role will they play in supervision? 

The CFPB says that “regulated entities are not required to comply with the Compliance Aids themselves….only the underlying rules and statues.” 

Financial institutions will still be free to decide the method they use to comply—even if it’s not addressed in a Compliance Aid—as long as it’s permitted by the applicable rules or laws. 

“When exercising its enforcement and supervisory discretion, the Bureau does not intend to sanction, or ask a court to sanction, entities that reasonably rely on Compliance Aids.”  

What is the CFPB’s goal for Compliance Aids? 

The agency introduced compliance aids designation to help FIs and the public by providing “greater clarity regarding the legal status and role of these materials.”  

What does this mean for Fair Lending risk? 

As we noted last year, the CFPB has been shifting its approach to Fair Lending supervision and enforcement to focus on preventing UDAAP and Fair Lending risks. The CFPB remains focused on student lending, mortgage lending, and small business lending. Redlining and HMDA continue to be top priorities. 

Compliance Aids are an effort by the CFPB to help FIs understand regulatory expectations and best practices to prevent violations.  

As Compliance Aids become available, consider reviewing the ones relevant to Fair Lending, UDAP, Redlining and HMDA to see if they align with your FI’s interpretation and policies. 

You can also rely on Ncontracts to follow these developments and help you ensure your Fair Lending compliance efforts are up to par with tools and advice, including this free Fair Lending checklist.  

 

Related: How to Build a Strong Fair Lending & Redlining Compliance Management System

Subscribe to the Nsight Blog

All Topics Risk & Compliance Product Insight Banks Lending Compliance Credit Unions Risk Management Fair Lending Nfairlending Cluster: Risk Management Compliance Lending Compliance Management Integrated Risk Blog Regulatory Compliance Management Nrisk News & Updates HMDA Risk Mortgage Lenders Vendor Management Ncomply CRA Business Resiliency Lending Compliance Blog Vendor CFPB Ncontinuity Business Continuity Third-Party Vendor Management Cybersecurity Fintech NVendor Strategic Planning Ncyber Regulatory Updates Ntransmittal Audits & Findings OCC Regulatory Compliance Company Culture Audit Nverify Compliance Management Exams FDIC Nfindings Findings NCUA Contract Management Employee Intranet Business Continuity Management Contract FRB Findings Management Enterprise Risk Management FFIEC Ncontracts manager Third-Party Vendors Vendor Risk Vendor Risk Management Wealth Management 1071 ABA Bank Access Control Artificial Intelligence Audit Findings Board Portal Call Report Compliance Risk Cybersecurity Assessment Digital Tansformation Due Diligence Efficiency Employee Engagement Exam findings FIEC Governance and Risk Management Inc. 5000 Internal Audit Management Nboardportal Verify integrated risk management
9 Keys for a Successful Fair Lending Compliance Management Program
Fair Lending

9 Keys for a Successful Fair Lending Compliance Management Program

Feb 18, 2016 3 min read
Unfair Lending: FTC Settlement Shows What Happens When Lending Policies Are Just Wrong
Fair Lending

Unfair Lending: FTC Settlement Shows What Happens When Lending Policies Are Just Wrong

Jun 17, 2020 2 min read
Fair Lending Enforcement Is Heating Up: Avoid These 3 Mistakes
Fair Lending

Fair Lending Enforcement Is Heating Up: Avoid These 3 Mistakes

Aug 12, 2020 4 min read