LDF Holdings Compliance Team Offers Tips

LDF Holdings’ online lending compliance leaders Kemberlar Smith and Alison Krich spoke recently at Leaders in Lending Annual Conference in Austin, Texas. We wanted to share what was discussed, because it is so important to a well-run organization.

In the presentation, they expounded on how remaining in compliance with state and federal regulations is crucial to an online lending business to grow. Organizations must create, maintain and monitor their policies and procedures. These are an essential part of any organization. Together, policies and procedures provide a roadmap for day-to-day operations. These ensure compliance with applicable laws and regulations, give guidance for decision-making, and streamline internal processes.

Kemberlar and Alison shared a high-level overview of the Compliance Management System (CMS), which is commonly referred to as the “Bible of Compliance” for all organizations, no matter the industry. They explained why a compliance program has to have an effective structure and how the policies and procedures are the nuts and bolts of the CMS Program.

An effective structure starts with the board and the specific committees responsible for overseeing the compliance program. Senior management then has to play an important role in the management and support of the compliance program.

To conclude the CMS discussion, they shared that policies and procedures should not just be sitting on a bookshelf. These documents are useful, relevant and provide protection for their organization.

Four Pillars of the Bank Secrecy Act

They reviewed the “4 Pillars” of the Bank Secrecy Act/Anti-Money Laundering/ Office of Foreign Assets Control (BSA/AML/OFAC) Law and Requirements. The BSA “4 Pillars” follow:

1. Compliance Officer regularly reviews policies and procedures to keep your organization up to date with regulations, technology, and industry best practices.

2. Internal Controls are designed to detect, prevent, limit and control financial risks.

3. Training should encompass current developments that involve BSA and other regulations. All employees must understand their role in maintaining an effective BSA/AML Compliance Program.

4. Independent reviews provide a fair and unbiased appraisal of each of the 4 Pillars.

More Compliance Resources

In addition to an organization’s internal policies, procedures and best practices, there are a list of alternative resources and recommendations. Kemberlar and Alison shared that they use the following to enhance their current programs:

1. Consumer Financial Protection Bureau (CFPB)

2. Better Business Bureau (BBB)

3. Federal Trade Commission (FTC)

4. Federal Communication Commission (FCC)

5. Online Lenders Alliance (OLA)

6. Native American Financial Services Association (NAFSA)

7. Legal Team

Separately, if a fit for an organization, third-party compliance companies and auditing firms can assist with keeping up with current changes within the market and auditing requirements.

Use SMART Goals

Kemberlar and Alison concluded their presentation with tips for setting internal goals for an organization’s compliance and overall health. They shared the SMART method to ensure goals are measurable and actionable and achievable.

S- Specific: Are your goals well defined, clear and unambiguous?

M- Measurable: What specific criteria are you measuring your progress against to accomplish your goal?

A- Achievable: Are your goals actually attainable?

R- Realistic: Are your goals realistic and relevant to your business purpose/needs?

T- Timely: Have you set a clearly defined timeline from starting date to target date?

In the end, LDF Holdings’ Kemberlar and Alison explained that you have to take one day at a time and not overwhelm yourself or team. Goals must be prioritized and worked on regularly and efficiently. Too much at one time causes stress and most likely failure at reaching set goals. Set SMART Goals for each of your goals. If you have any questions or would like to know more about this presentation please contact us.