Pub. 4 2014-2015 Issue 4

12 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S FEATURE ARTICLE COMPLIANCE ALLIANCE Typically when you think about vendor management, the last thing on your mind is UDAAP and consumer compliance violations in connection with the bank’s products or services. Vendor Management Nuaces F rom the recent regulatory outreach ses- sions, some very interesting comments have beenmade concerning vendor man- agement and correlation with Unfair De- ceptive and Abusive Acts and Practices (UDAAP) as well as vendor management being a primary contributor to bank’s compliance violations. Typically when you think about vendor management, the last thing on your mind is UDAAP and consumer compliance viola- tions in connection with the bank’s products or services. When performing vendor man- agement reviews, the bank is focused on the vendor’s financials, business continuity, disaster recovery and other areas that deal with the vendor’s ability to continue to pro- vide the service the bank is contracting for. How does vendor management play a role in consumer compliance violations? When you read regulatory agency’s reports on common violations, it is easy to spot vendor-related issues. For example, many of the truth-in-lending violations being cited in recent exams stem from third party prepared documents. Even though a third party may have prepared the documents or even provided the software for the bank