Pub. 4 2014-2015 Issue 4

to use for document preparation, it is the bank’s responsibility to ensure the accuracy of the documents. Depending solely on the vendor, without verification, could lead to costly violations. With that being said, how does vendor management, or the lack of adequate vendor management, play a role in UDAAP? This is an issue that has been in many news stories lately and at the bottom of several civil money penalties and fines. The issue that causes the UDAAP claim is that the bank’s vendor is prac- ticing what is commonly known as “negative optionmarketing.” Exactly what does this mean? Well, the bank offers a product or service through a third party to its consumer customers in which the customer must specifically notify the bank, within a specific timeframe, if they want to opt-out of the service. Does this sound familiar? We have seen these types of products for years; for example, a credit monitoring service is offered initially for free to the consumer, but after a specified timeframe there is a fee attached, UNLESS the customer specifically contacts the bank to opt-out of the program after the initial period. How does that fit into vendor management? Well, the bank should understand their vendors and their products, and should ensure all disclosures contain all of the appropriate language, and in the example cited, ensure the initial period is clearly documented as well as the opt-out requirements. Regulators are not going to cut the bank any slackwith vendor management in regards to consumer violations. Make sure when you are completing vendor management due diligence that you include a review of the products or services those vendors will be offering for the bank.  CORE BANK PROCESSING • MANAGED SERVICES • MOBILE & INTERNET SOLUTIONS PAYMENTS PROCESSING • ELECTRONIC & PRINT DISTRIBUTION • REGULATORY COMPLIANCE TODAY I SEE THE WORLD FROM ALL NEW ANGLES. It’s time your data streams became revenue opportunities. Gone are the days of sifting through reports and “running the numbers.” Your data should be actionable and results-oriented. With CSI IQ, your institution can access powerful business intelligence tools that change the way you see your customers—and your customers see you. csiweb.com/vantagepoint Contact us today at 303.860.0242 or toll-free at 888.554.5539 with a referral coloradoenterprisefund.org Clementine Art Now offering loans up to $500,000 including SBA 7(a) loans up to $250,000