“Culture of Compliance” is one of the most overused phrases in business today.  But, with the continuous evolution in the regulatory environment, the need to adapt and change that culture within the ARM industry should be the first priority of everyone responsible for compliance.  And with these changes, does your organization have the understanding that everyone is responsible for compliance?  And, if they understand they are responsible, do they know what steps to take to be successful?  Whether it is your hiring team checking backgrounds, your operations team making sure every call can pass the compliance test, your sales team vetting clients to ensure they aren’t asking for non-compliant activity, or, at the very head of the process, your Board of Directors setting policy and requiring compliance throughout your organization; everyone must be committed to compliance for it to truly be a culture.

Top Down:

Board of Directors.  Are they involved in a meaningful way in the compliance direction for the company?  The first most important step is the involvement of your senior leadership.  If they set the tone the others will follow.  Are they getting reports?  Are they investigating findings?  Are they holding the right people accountable?  Can you show a clear path and expectation from them for everyone in your organization?

Compliance Framework:

Can you prove you “walk the walk”?  Do you have clear policies and procedures?  Do you have a compliance charter? Is compliance part of your daily business? Do you have audits and reviews set up?  Are your employees accountable for compliance and is it a meaningful part of their compensation package?  Do you have a consumer centric complaint response process?  Can you quickly and easily show a regulator what compliance means in your organization?  Does your Compliance Committee have members from all parts of your business?

Hiring:

You have to hire the right people for the job.  The obvious part is doing the required background checks and drug screenings.  But have you invested in career profiling?  Have you identified successful, compliant employees and used their skill sets, behaviors and answers to questions as a benchmark for future hiring?

Training:

You can’t just tell your employees what or what not to do.  You have to tell them why.  For them to understand their boundaries they have to understand the framework.  How often do you provide training?  If the answer is annually you are not training enough.  Training should be part of every floor meeting and reinforcement should happen throughout the day.  A comprehensive training program has expense but the cost of non-compliance is much higher.  If you walk into different departments in your organization, can your employees explain what is required of them for compliance and the policies they are responsible for upholding?

Adapting:

First walk then run.  You must learn from the mistakes you find through audits and reviews.  If the process is wrong fix it.  Don’t hide it, don’t minimize it.  Encourage your employees to bring you issues.  Be able to make change quickly.  It is very easy to get bogged down by process and past practices.  You must be fluid to be successful.  Large mistakes may be the most visible, but continuous small mistakes can be just as damaging – both financially and to your reputation.  Develop and use a concise change control process.  Fix the issue, document the scope of the problem.  Finally, check and double check your fix, and move on.

Incentivizing:

Pay for Compliant Performance.  How are you paying your collectors?  Many companies use reductions for compliance violations, but most of us will work harder to achieve an incentive.  Do you reward for finding compliance issues?  Do you give a bump for people that remain compliant throughout a month?  Have you explored raising salaries and doing away with bonus altogether?

KISS:

“Keep it simple silly”.  So many organizations are building multi-layer, all-encompassing compliance programs which are difficult to manage, much less make understandable throughout the organization.  Many of the more complex functions can be programmed into your systems.  Compliance professionals can help you breakdown complicated regulations into small manageable bites.  Everyday compliance, and a true culture shift, comes from a very simple idea, the ethical treatment of consumers.


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