Tools and Techniques to Develop Sales Practices and Incentive Compensation that Minimize Regulatory Risk and Avoid UDAAP Violations
In November 2016, the Consumer Financial Protection Bureau (CFPB) issued a compliance bulletin that addresses detecting and preventing consumer harm from incentive compensation arrangements. Prompted by Wells Fargo Bank’s alleged improper incentive compensation arrangements, the CFPB’s bulletin makes clear that while properly implemented and reasonable incentives can benefit companies, employers and the financial market overall, “incentive programs can pose risks to consumers, especially when they create an unrealistic culture of high-pressure targets.” Financial institutions need to be aware of the CFPB’s new directives to ensure that their incentive compensation programs, both for employees and third-party service providers, comply with laws regarding unfair, deceptive and abusive (UDAAP) acts and practices.
In this session, expert speaker Chrys D. Lemon will provide you with tools and techniques to develop sales practices and incentive compensation arrangements that are designed to minimize regulatory risk. Chrys will talk about how an incentive compensation program can create UDAAP problems if it is not properly structured, and he’ll help you learn how to ensure that your company does not become the next target of the CFPB’s enforcement efforts in this hot compliance area.
How an incentive compensation program can lead to unfair and deceptive sales practices, a primary concern of the CFPB, especially in the offering of add-on products
Review the Wells Fargo enforcement action on incentive compensation and the related CFPB bulletin
Review other enforcement actions where the CFPB has found that an incentive compensation program may have led to improper sales practices
How to develop compliance monitoring, vendor management, and quality assurance programs to identify sales practices that implicate UDAAP laws
How to ensure a financial institution's compliance management system is capable of identifying improper sales practice when it comes to incentive compensation arrangements
Who Should Attend
Anyone involved in connecting financial services sales benchmarks to incentive compensation arrangements
Chrys Lemon is a partner in McIntyre & Lemon, PLLC, in Washington, D.C. He specializes in financial services law, particularly related to marketing of consumer financial products and services, privacy law, insurance law, and regulation of financial institutions by the Consumer Financial Protecti...
Disclaimer: The content herein does not represent any association between CFPB and Eli Financial LLC. CFPB neither endorses any product of Eli Financial LLC nor warrants accuracy of the content hereto.