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Insider’s View: The importance of Policies and Procedures in CFPB audits

Insider’s View: The importance of Policies and Procedures in CFPB audits

A vast majority of industries today find themselves challenged to keep up with the demands of the consumer’s ever-changing needs and the changes within the laws and regulations. Companies are discovering the importance of well-written and easy-to-follow policies and procedures (P&Ps) in CFPB audits.

As companies experience Consumer Financial Protection Bureau audits, one topic is being discussed: their P&Ps. Many state, “It is not important to document everything we do; these are our trade secrets.” Unfortunately, in today’s business world, that is not the case.

Many of us have read and seen the news segments regarding corporations receiving large fines due to the financial crisis.  We don’t hear that some, if not a large majority, of these failed audit findings may have been avoidable with better and more detailed documentation of their P&Ps.

I have had the privilege (and yes, it was a privilege) to be part of two CFPB audits with two different companies. One of the key factors with both audits was the detailed information included in the P&Ps and whether the associates within the companies were adhering to these P&Ps.

Well-written P&Ps are a lifesaver when going through any type of audit, particularly the CFPB, as well as training the new associate or a refresher course for the associate who has been on vacation, LOA, etc. Companies must ensure they have addressed and adhere to the laws and regulations within their state and the Federal Government.

Ensuring the associate has read, understands, and has received training on new and/or changes to existing processes is vital to the organization and for auditors. The purpose of well-written P&Ps is to provide an effective first line of defense in documenting, training, monitoring processes, and mitigating operational risk due to:

  • Failure to follow business processes.
  • Breaks in a business process due to systemic failures.
  • Incomplete or inadequate design of business procedures.
  • Failure to account for all regulatory requirements in designing and implementing the business procedures.

To ensure companies can achieve their documentation goals and sail through their audits, I have found that Zavanta is the best standard operating procedure (SOP) software that is on the market. Zavanta allows my clients and me to streamline processes, link related internal and external documents, perform gap analysis, and provide current and archive documentation when requested with no struggles. I have been a Technical Writer for 16+ years and have used different SOPs for documentation, and Zavanta is the Best in Class for all documentation needs.

Guest blogger, Shelly Snapp, shares first-hand experience of why well-written policies and procedures are a life-saver in navigating Consumer Financial Protection Bureau (CFPB) audits in particular.

Independent Consultant.  Visit me on LinkedIn.

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