CFPB Readiness Series: Compliance Management System (CMS) Overview
Do you need to establish a compliance management system (CMS)? Are you interested in learning more about the CFPB’s requirements for creating and maintaining an effective compliance management system?
What is a Compliance Management System?
A CMS is a set of interrelated or interacting elements that organizations use to direct and control how compliance policies are implemented, and compliance objectives are achieved. A CMS typically has four core interdependent control components:
- Board and management oversight
- Compliance program
- Response to consumer complaints
- Compliance audit
A CMS also follows a four-phase plan:
- Phase One: Plan
- Phase Two: Do
- Phase Three: Check
- Phase Four: Act
Why is a Compliance Management System Important?
According to the CFPB, “A critical component of a well-run financial institution is a robust and effective compliance management system…. Consequently, one of the most important responsibilities of the CFPB supervisory program is assessing the quality of the Compliance Management Systems employed by the financial institutions under the CFPB’s jurisdiction.”
For more information about how KirkpatrickPrice can assist you in meeting your compliance objectives, contact us today.