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Compliance Training Program

Q: Why is it important to have an adequate compliance training program?

A: It is important for a residential mortgage lender to develop and implement a written compliance training program to provide employees with the tools needed to succeed given the various rules and regulations that apply and because of the constant regulatory changes. Regardless of a residential mortgage lender's size, a well-developed compliance training program is a critical component to an effective compliance management system ("CMS"). As part of a thorough CMS, a robust training program helps a company and its employees keep up-to-date on regulatory changes that may impact the business, make correct decisions, manage risks, and avoid costly errors or other legal and/or compliance missteps.

A residential mortgage lender's compliance training program should be current, effective, and commensurate with the entity's size and risk profile. Oftentimes, this requires training courses to be specifically tailored to reflect how a company operates. It is important that all employees be familiar and in full compliance with a company's policies and procedures, as well as federal and state consumer protection laws. Employees should also receive comprehensive training based upon their job functions and responsibilities.

Per the Consumer Financial Protection Bureau's Summer 2013 Supervisory Highlights edition (http://files.consumerfinance.gov/f/201308_cfpb_supervisory-
highlights_august.pdf
), mortgage lenders must provide ongoing training to Board members management and staff. Further, certain federal and state rules and regulations require training on specific subject matters at least annually. For example, mortgage lenders must provide anti-money laundering and privacy/security awareness training at least annually.

It is recommended that all training (whether informal or formal) be tracked and memorialized so that a mortgage lender can demonstrate to its regulators that employees are properly completing courses. Further, requiring a test component helps ensure employees are sufficiently grasping the material presented. It is important to note that no two compliance training programs will be identical. Your company's size, organizational structure, and geographical reach may dictate the structure of your program.




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