Financial institutions face rising scrutiny from regulators, and regulatory investigations are increasingly common. Sometimes, settlement and a resulting consent order is necessary to resolve the investigation. Reaching an agreement on terms is an important milestone, but it’s not the end of the story.
When the consent order includes customer remediation, your regulator will often require that you select and retain a third-party administrator. This administrator can become an important actor in satisfying the terms of your agreement and ending the heightened scrutiny a consent order entails.
Once settlement terms are agreed to, organizations are often faced with short deadlines and an urgent requirement to find an administrator that meets your needs and obtains regulatory non-objection – a responsibility that most frequently falls to the financial institution.
This step deserves close attention, as a poorly executed remediation program could prolong a consent order and further strain your institution’s relationship with its regulator.
Fortunately, there are a few basic guidelines that can help you conduct due diligence. Key qualities to look for in a consent order administrator include:
Other important considerations include speed, accuracy and attention to detail – all of which matter during a costly settlement process where every dollar counts and there may be significant and complex tax information return reporting requirements.
Using these guidelines, you can select an administrator that will deliver the best overall value--completion of the consent order at the earliest practical time along with rebuilding trust with regulators, customers and other interested parties.
For a more in-depth look with expert opinions and detailed guidance, download Epiq and Bloomberg BNA’s white paper today.
Lauran Schultz is vice president of client services at Epiq. He consults extensively with clients to design complex civil and regulatory remediation programs related to mortgages, retail banking, wealth management, vehicle financing, credit card processing and other financial services. Schultz also provides notice expert services as executive director of Epiq’s Hilsoft Notifications subsidiary. Under Schultz’s supervision, Epiq is currently administering settlements related to the US Department of Justice (DOJ), Federal Reserve System, Office of the Comptroller of the Currency (OCC), Consumer Financial Protection Bureau (CFPB), US Department of Housing and Urban Development (HUD), Securities and Exchange Commission (SEC), Federal Deposit Insurance Corporation (FDIC), and New York Department of Financial Services among other regulators. Epiq has also been retained to administer self-identified voluntary remediation programs for various financial institutions.