Consumer Compliance Programs

Smith Regulatory Strategies, LLC (“SRS”)  has experienced Senior Advisors who can help prepare your financial institution or firm for an impending Consumer Compliance examination or develop remedial steps to improve compliance performance.

Our Senior Advisors include former Consumer Financial Protection Bureau (CFPB) and Federal Deposit Insurance Corporation (FDIC) senior examiners who bring enormous (in most cases more than a combined 30 years of) experience in retail banking and evaluating the “Compliance Management Systems (CMS)[1] of both financial institutions and financial product and service providers.  SRS experts can review your CMS and highlight aspects that are in need of strengthening in preparation for an examination.

Why is CMS so important? (per the CFPB Examination Manual):

·         Entities within the scope of a regulator’s supervision and enforcement authority include both depository institutions and non-depository consumer financial services companies.

·         To maintain legal compliance, a supervised entity must develop and maintain a sound CMS that is integrated into the overall framework for product design, delivery, and administration — that is, the entire product and service lifecycle.

  • Compliance should be part of the day-to-day responsibilities of management and the employees of a supervised entity.  Ideally, issues should be self-identified; and corrective action should be initiated by the entity.
  • Weaknesses in an entity’s CMS can result in violations of law or regulation and associated harm to consumers that can often result in financial penalties to the entity.
  • Regulators expect every entity under their supervision and enforcement authority to have an effective CMS adapted to its business strategy and operations.
  • Each examination includes review and testing of components of the supervised entity’s CMS.

How can SRS help?

Our Senior Advisors have been directly involved in hundreds of consumer compliance examinations of both banks and non-banks of various sizes and business models with the CFPB, the FDIC, and the OTS (Office of Thrift Supervision).  They have overseen portfolios of banks from a $30 million single-office rural bank to a $2 trillion and Systematically Important Financial Institution (SIFI) with a world-wide presence.

They have years of hands-on experience reviewing a wide variety of CMS programs and their individual components, and can provide insight as to which CMS components work well.  Our Senior Advisors have seen many different CMS models and can offer their wealth of experience in identifying successful pieces of a CMS puzzle that will work for your firm’s particular situation and yet address the regulators’ policy objectives.


[1] An effective CMS, per regulator examination manuals, commonly has four interdependent control components:

1) Board and senior management oversight

2) compliance program

3) response to consumer complaints

4) compliance audit