JP Morgan Chase Bank is not necessarily feeling love from the CFPB. They were levied a 4.6 million dollar fine by the bureau. It all stems from bad policy, and compliance negligence. Banks screen all potential customers for previous checking account behavior, with information gathered by various consumer-reporting businesses. On the supply end, banks are legally required to maintain proper processes to make sure the information they report about a consumer is accurate. Chase failed in this regard, and was smacked with a hefty fine.
The CFPB says that because the information was not reported accurately, customers were kept in the dark regarding application disputes and denials. The fine is a preventative measure. However, to JP Morgan Chase Bank, it is one expensive call. Notice the phrase “preventative measure.” That is quoted directly from CFPB director, Richard Cordray. Hiding behind those words is a clear message... mess up again and it will be worse.
So where does the basis of the fine stem from? The Fair Credit Reporting Act. Failing to have systems in place for accurate reporting and failing to provide consumers with investigation results regarding disputes is a direct violation of the law. As a result, they are paying a hefty price. Just recently, about 30 credit unions received penalties for filing late quarterly reports last year.
Could Your Credit Union Survive Non-Compliance?
One thing this illustrates, is that the CFPB does not play around with compliance. And while it took time to generate results from their investigation, they did get results and JP Morgan has to pay. Furthermore, if they investigate your credit union, it probably won’t take as long to find results.
Could you survive a non-compliant event? It is a question worth careful consideration. All it takes is one examiner on a mission to find one item out of compliance. It probably won’t cost your credit union $4.6 million, but it could cost thousands. Why take the risk?
The good news is, there is something you can do. Look around and examine who is handling your credit union compliance. Are you confident that the necessary steps are being followed? Check to see if your credit union is at risk. Use Oak Tree as your forms and disclosures provider, and take the risk to zero. Examiners will come in looking for signs of noncompliance during the audit and depending on what they find, the enforcement will take the punitive steps. Forms can be one of those overlooked areas where compliance officers can find fault. When you use Oak Tree as a forms provider, you can rest assured that your forms will be current and up to date. We pride ourselves in providing compliant forms packages that suit every state and federal need.
If you have questions, reach out. We would love to explain how easily our forms integrate with your data processor, and how much of a difference they can make for you and your team. Don’t wait for a JP Morgan event to occur.
Connect with us and put your compliance concerns to rest! www.OakTreeBiz.com.
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