UDAAP Compliance Solutions Offered at March Dinner Meeting
Expert View of the Economy Presented By Matthew Resch
The advent of the Unfair Deceptive Act and Abusive Practices, better known as
“UDAAP” requires banks to operate in era of “fairness” to the customer while
challenged to maintain profitability in a low-interest rate environment under
the narrowest of margins. Asaad Faquir, Director from RSK Compliance Solutions
presented a comprehensive review of the provisions of UDAAP at the March Dinner
Meeting. He emphasized the obligations that UDAAP places on banks and
recommended the strategies that institutions can employ to maintain compliance
by designing processes that are fair
by design, thus preventing the unfair
from occurring.
The
Chapter’s March Dinner Meeting was held at the Stony Hill Inn in Hackensack, NJ
on Wednesday, March 20, 2013. The afternoon Mini-Session featured a very
informative economic outlook presented by Matthew Resch, Principal from the
Ambassador Financial Group. A splendid cocktail hour preceded the full-course
dinner offering Members and guests the opportunity to mingle and relax while
enjoying their favorite cocktail along with a lavish array of fine appetizers
served by the expert staff at the Stony Hill Inn.
During his dinner presentation, Mr. Faquir emphasized that banks have the
obligation to become aware sellers of their products and services and must
strive to be above reproach concerning consumer protection. He defined the
Dodd-Frank standard of “unfairness” to the consumer and the conditions in which
a bank’s representations, acts or practices may be considered to mislead a
customer or create a material deception.
He enumerated the considerable risks a bank faces when failing to comply with
the provisions of UDAAP which include significant financial penalties, possible
consumer revolution as well as compromising the bank’s reputation in the
marketplace. He provided excellent examples of deceptive advertising and other
UDAPP violations, described the compliance challenges that banks face and
summarized the framework of the design process necessary for a bank to achieve
compliance.
Matthew
Resch presented The Economy, The Fed and
Interest Rates during the afternoon Mini-Session. He provided an expert
review of the state of the economy, Federal Reserve monetary policy and the
current interest rate environment.
Matthew
keenly described how decreased loan demand in key markets over the last five
years is the “issue” that is pushing banks toward the margin “cliff” through
forced investment in extremely low-rate demand deposits.
Matthew
summarized key strategies that financial managers can utilize in order to
maximize profitability in the current low-margin investment environment. He
noted the importance of maximizing earnings by managing interest rate, credit,
liquidity and earnings risks with a balanced approach. He emphasized the need to
be flexible, adding sources of non-interest income where feasible and consider
growth through acquisitions.
Topics and Speakers
Dare To Be Fair
Unfair Deceptive Act & Abusive Practices
The Economy, The Fed
and Interest Rates