Dealing with Bank Collection Compliance Issues
Utilizing superior bank software has never been more important in terms of collection compliance. That’s because financial institutions face unprecedented regulation and consumer complaint issues.
As of Aug. 1, 2015, the CFPB has handled approximately 677,200 complaints about products including credit and debt reporting, mortgages, student loans and more. This includes 26,700 complaints in July 2015 alone.
According to the latest debt collection litigation and complaint statistics report from WebRecon, the most reported consumer concern about debt gathering was being contacted about a debt they did not consider they owed (44 percent), followed by debt disclosure verification (18 percent) and communication procedure (17 percent).
Using advanced bank loan collection and recovery software helps financial institutions provide improved rules observance, resource efficiency, and superior reporting. CARM-Pro helps banks reconcile debt successfully, and retain control of costs and accountholders.
A startling reminder of the complexity of existing lending rules came when the Office of the Comptroller of the Currency (OCC) asked Bank of America Corp., the No. 2 U.S. bank by assets, to pay a penalty of $30 million due to non-home loan compliance with the Servicemembers Civil Relief Act (SCRA) and risky non-home debt practices.
The OCC, which regulates and supervises all nationwide banks, also ordered "remediation" to about 73,000 affected customer accounts."The enforcement action is intended to correct deficiencies in the bank's practices and procedures related to its SCRA-compliance program," the OCC said.
The order covers litigation from several years ago for a small percentage of credit card and deposit overdraft customers who defaulted on their account, BofA said.
BofA changed its regulations group to risk oversight group from the legal department earlier this year after regulators cautioned megabanks to implement a more principled in-house philosophy.
Your training can use cost-effective technology to meet legal conformity pressure while honoring your deep-rooted service culture.
For financial institutions, regulatory challenges will be in the governance and third-party vendor management areas. They will also face challenges during the examination process, and will not only need to guarantee data is protected from cyber attacks, but will also need to ensure that cybersecurity policies are compliant from the regulators’ perspective.
From a risk perspective, a financial institution face the test of keeping data protected from cyber attacks and hackers.
Under U.S. laws such as the Gramm-Leach-Bliley Act, financial institutions can outsource information management but not regulatory liability. If a breach occurs, your organization must notify your own clients, state Attorneys General and federal agencies, as applicable. Your organization retains liability and possible enforcement actions based on supplier violations, regardless of your organization’s knowledge, involvement, or lack thereof.
CARM-Pro, dependable and vigorous bank collections software, could eliminate problems before they occur even when regulations change. It Improves regulation awareness, and helps prevents fees or fines.