There has been a rhythm to my Back To Basics blogs over the last two years. I started the effort with the expectation that I would remind readers of the impact on the day-to-day business operations of the various federal consumer laws, rules, and regulations. Starting with the Truth-in-Lending Act and going through the Dodd-Frank Wall Street Reform and Consumer Protection Act has given me a wealth of material to share with you.

And, as I have learned about particular operational issues and problems within the industry, I have commented on these, often suggesting solutions. That is, the feedback that I receive from readers continues to drive a lot of my content.

Then, there are the occasional blogs addressing both old and new topics that cause “heartburn” for owners, supervisors, and managers because of the failures of CSRs to properly address the requirements of their jobs.

Focus for a moment on the evolution of regulations in the consumer finance industry. What started with pretty short and direct restrictions imposed by the Federal Trade Commission, have now morphed into very detailed regulations promulgated by several agencies of the federal government, including the Federal Reserve Board, the Federal Communications Commission, the Consumer Financial Protection Bureau and even the Department of Defense. There is no shortage of federal government agencies that have a hand in regulating consumer finance. And, this observation does not even address the role of state regulators.

I have found that the best way to keep a handle on all of the various laws, rules, and regulations is to have in place a detailed compliance management system. Such a system or program generally means that all of the policies and procedures that are mandated or just implicated by the federal laws, rules, and regulations, are locatable in one place. And, a compliance program that is systemically reviewed and updated, encourages management to maintain focus on the frequent revisions and updates of these laws.

We know that the consumer finance industry is one of the most heavily regulated businesses in our country. (One thing that this pandemic has reminded us of is that consumer finance is the fuel that drives the American economy.) So, it is critically important that we stay mindful of changes in the law, and even more important that we do not forget to retrain our CSRs frequently in the “basics.”

As we all know, an ounce of prevention is worth a pound of cure. In our industry, when the cost of curing errors is exceedingly high, it seems even more incumbent on management to keep preventable errors from occurring in the first place.

Please note: This is the one hundred twentieth blog in a series of Back to Basics blogs, in which relevant and resourceful information can be easily accessed by clicking here.