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

 
 
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.
 
A vast majority of industries today find themselves challenged not just to keep up with the demands of the consumer’s every changing need, but also the changes within the laws and regulations. Companies are discovering the importance of well written and easy to follow Policies & Procedures (P&Ps).
 
As companies experience Consumer Financial Protection Bureau CFPB audits there is one topic being discussed, and that is 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; what we don’t hear is 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&P’s. 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 their detailed information included in the P&P’s and whether the associates within the companies are adhering to these P&P’s.
 
Well written P&P’s are a life saver when going through any type of audit particularly the CFPB, as well as training the new associate or a refresher course for the associate that 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 are 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 a 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 the design and implementation of the business procedures
     
To ensure companies can achieve their documentation goals and sail through their audits, I have found 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.
 
Shelly Snapp, Independent Consultant  Visit me on Linked In