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Feeling anxious about the recent changeover to the Consumer Financial Protection Bureau? Worrying about what happens to the regulations we know--but don't necessarily love--when they fall into the hands of new regulators? Wondering how to advise management while not looking foolish in hindsight?

There are times when compliance managers feel alone. People in the bank don't want to chat about compliance. Lenders don't seem to find RESPA particularly interesting, so go have that conversation about finance charges with someone else, please. Branch managers don't think CRA is good for small talk. And don't ever try to have a friendly chat with an officer about Reg O! 

People in the bank particularly don't want to talk about a new regulator. The familiar examination process is plenty to deal with, they're thinking.

If you are having these worries, imagine how your examiner feels.

The other side of the desk

The examination corps faces enormous change,  Their agencies are going through a genuine merger and acquisition crisis and staff in the agencies is about as happy as the staff of an acquired bank. Change is being forced on them and they don't necessarily like it.

Some examiners are staying put, but with changed responsibilities. Some are moving agencies, such as OTS to OCC. Others are changing worlds by moving to the CFPB. Even in agencies that appear to be staying the same, things are changing.

Anxiety?  Examiners are definitely feeling it.

If the so-called friendlies inside the bank don't desire your company, why not try talking to the examiners? 

Granted, you probably don't have them on your speed dial list so you can have a quick chat about the meaning of 226.18(f) or 202.7(d).

But perhaps you should think about putting your examiners on speed dial.

After all, who else knows the regulations like you do? (Or like you should?)

Examiners (especially compliance examiners) and bank compliance managers have much in common--often more in common that compliance managers have with anyone else in the bank. And who else is facing the change presented by the transition to the CFPB?

A serious thought about alliance

This is an ideal time to think about teamwork.

Your team should include your examiner. Not only are both you and the examiners facing an immediate future that is murky at best, you both have the same job to do:

• • You want your bank to look good whenever compliance concerns are raised.

• • The examiner wants his or her agency to look good when compared to CFPB.

• • Examiners for CFPB want to show that the new bureau is doing its job.

But everyone's goal is compliance. How we achieve compliance is the challenge.

We can fight with each other about petty details or we can work together to design something that works.

Survivors' guide to the near future

Going to battle with examiners right now is just not smart. Putting up fortifications is not only a wasted exercise (because it doesn't necessarily produce compliance) but it sends a very negative message:

We'd rather fight than do things right.

And just as this is a good time for banks to present the best compliance image possible, it is a time when examiners feel threatened from all sides. Their jobs, as they have know them, are changing. Banks don't always smile when they see them coming. Consumers wonder why they haven't been getting the job done-after all, if consumers got predatory loans and lost their homes, clearly the examiners were missing something.

So this is the time to focus on making your examiner part of your team.

Play nice and you can both improve your game--perhaps even win.

Some specifics to consider:

1. Asking advice from examiners, sharing questions, and discussing ways to approach things like monitoring and reporting, can accomplish a great deal.

You find out how your examiner approaches regulatory issues. You can find out what the examiner considers to be an appropriate level of monitoring and reporting.

This is valuable knowledge. It is the equivalent of radar and sonar. You can have a glimpse into what is flying around out there and prevent a crash.

2. When it comes to specific regulatory questions, it helps to know what the examiner thinks.

Many issues, such as whether a fee is a finance charge, are not always clear. It is much better to find out your examiner's opinion before the exam than during the exam.

Some compliance managers are reluctant to call their examiner because they fear the call will reveal a lack on knowledge. This is not something to worry about--especially in the current environment.

Everyone--bankers and examiners alike--is doing some guessing.

3. Remember that you both share the feeling of drowning.

Everyone is overwhelmed. When significant regulatory changes are published at the rate of more than one a month, there simply isn't time to be on top of everything. Sometimes we can't finish studying one new regulation before two more land in our lap. At times like this, it is useful to have resources--friendly resources. That should include your examiner.

4. One more reason to make your examiner part of your team: a good exam.

When you are in regular contact with your examiners, both you and the examiner know what to expect. You can better predict the examination outcome for management and the examiner can do a better job of planning and scheduling the exam.

The exam should go more smoothly.

And both you and the examiner look good.

OK, now let's be realistic too

There are limits, of course, to teamwork.

The examiner's job is not precisely the same as yours.

You may have the same goal, but you answer to different coaches.

The examiner must follow the goals and priorities of his or her agency, while you must deliver and manage a good compliance program for your bank.

If the bank's goal requires taking some compliance risk, you and the examiner may not see eye to eye.

But if you work together as a team before the examination, you can take the examiners' concerns into account in your compliance program and minimize surprises when the exam occurs.

For example, a higher-risk product can be managed with tighter risk management tools, such as more frequent monitoring, review, and reporting. By knowing the examiner's concerns when the product is in development, you can design a program to address those concerns.

Talk back! Do you agree with Lucy's concept? Tell us how you feel, and about your own bank's experiences. And it you're an examiner, tell us how well you think this approach will work.

• About Lucy Griffin "Lucy and Nancy's Common Sense Compliance" is blogged by both Lucy Griffin and Nancy Derr-Castiglione, both longtime ABA Banking Journal contributing editors on compliance.

• Lucy, a Certified Regulatory Compliance Manager, has over 30 years experience in compliance. She began as a regulator, including stints with the Federal Reserve Board, the Federal Trade Commission, and the Federal Home Loan Bank Board. For many years she managed the ABA Compliance Division. Since 1993 she has served as a compliance consultant as president of Compliance Resources, Inc., Reston, Va. She is also editor of Compliance Action newsletter and senior advisor with Paragon Compliance Group, a compliance training firm. 
   
  In addition to serving as a Contributing Editor of ABA Banking Journal, Lucy serves on the faculty of ABA's National Compliance Schools board. For more than a decade she developed and administered the case study at ABA's National Graduate School of Compliance Management. She can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it  

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