The CFPB (Consumer Financial Protection Bureau) recently released examination priorities around lending practices of financial institutions. These examinations will ensure that all financial institutions are staying compliant in fair lending practices. Now, more than ever, having an up-to-date and robust system that self-monitors fair lending practices for your institution is critical make sure you are complying with these federal regulations.
There are some very compelling reasons why your financial institution should have a self-monitoring system to ensure compliance. If you are either using outdated technology or don’t have a streamlined software that is monitoring lending practices, it is time for an update.
Automated commercial and consumer lending software streamlines the lending process and ensures small businesses have the capital they need as long as they meet the criteria set forth by the financial institution. Look for a system that boasts the following elements:
Automating processes, such as the lending requirements for small-business loans, ensures that each financial officer is following the same process to reach a lending decision. Not only does such automation ensure compliance, it also streamlines workflow, improves productivity and increases efficiency.
Regardless of the experience and diligence of the loan officer, the fact that a typical loan document comprises multiple pages of information means that the potential for a crucial fact or vital piece of information to be overlooked can be significant. This can put the bank at risk for compliance issues. The right automation system ensures that only documents that have passed all compliance requirements are presented to lending officers. Any data points that are not in line with specified parameters are flagged for further research.
Prior to automation, small-business loans often took days or weeks for the pertinent information to be entered and reviewed. Relying on automation significantly reduces that investment of time to a few hours or even minutes.
One of the strongest cases for automation is that it automatically ensures compliance without ambiguity. Federal, local and internal compliance parameters are automatically updated, giving banks the assurance that lending officers are always complying with the applicable regulations.
CLOUDecision provides a comprehensive and robust solution for financial institutions who want to ensure that they comply with small business fair lending practices every time a loan application enters their system. Small Business Decisioning software takes the guesswork out of small business loans, reduces processing times and, most importantly, ensures complete compliance with the latest government regulations. Financial institutions can learn how CLOUDecision can help them make sound and compliant risk management decisions by registering for a free demo today.