INSIDE COMPLIANCE

Compliance failures in banking can often result in real harm to borrowers.  In the case of Wells Fargo, a compliance error resulted in 400 of the bank’s customers losing their homes.  Due to an issue in the bank’s software system, the institution denied loan modifications to borrowers who should have qualified.  This latest failure adds to the myriad of issues Wells Fargo bungled over the past several months.  For compliance professionals, the failure demonstrates the risks of automation in compliance, the importance of technical expertise, and the risks of decision-making without putting the interests of the customer first.