June 11, 2025 • 22 mins
As regulatory scrutiny intensifies and innovation accelerates, fair-and-responsible banking leaders are coming together to keep compliance programs adaptive, effective and aligned with evolving expectations.
In this episode, recorded at CBA Live 2025 in Orlando, host Lynn Sautter Beal sits down with Lindsay Yousif, Executive Compliance Director at Ally, and Nick Roesler of M&T Bank. Both serve on the CBA’s Fair and Responsible Banking Committee and share how their institutions—and the committee at large—are tackling today’s most pressing compliance challenges, from AI-driven fair lending tools to examiner turnover and uneven regulatory interpretations.
Join us as we discuss:
In this episode, recorded at CBA Live 2025 in Orlando, host Lynn Sautter Beal sits down with Lindsay Yousif, Executive Compliance Director at Ally, and Nick Roesler of M&T Bank. Both serve on the CBA’s Fair and Responsible Banking Committee and share how their institutions—and the committee at large—are tackling today’s most pressing compliance challenges, from AI-driven fair lending tools to examiner turnover and uneven regulatory interpretations.
Join us as we discuss:
- How FinTech partnerships can drive innovation while meeting evolving regulatory expectations
- The value of benchmarking and third-party consulting in building more resilient compliance programs
- The growing role of AI in fair lending—and what that means for oversight and risk management
- Strategies to manage inconsistent regulatory requirements and examiner transitions
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Hello.
Speaker 2 (00:04):
This is Lynd Soderbiel and welcome to Leaders in Lending.
I'm joining you here from CBA live in Orlando, and
we have Lindsay Yusf and Nick Rustler from the Fair
and Responsible Banking Committee. Lindsay and Nick, can you introduce
yourself and tell us a little bit about your background.
Speaker 1 (00:21):
Sure, I'm Lindsay yus If. I'm the executive Compliance Director
at ALI and also the fine or the Fair and
Responsible Banking Officer. In addition, I am the vice chair
of the Fair and Responsible Banking Committee for the CBA.
So I have been in banking for about twenty four
years now and have worked in all different areas, mostly
with CIRE Fair Lending and formerly as a chief compliance officer.
Speaker 3 (00:45):
Hi.
Speaker 4 (00:45):
Nick Raisler M and T Bank Fair and Responsible Banking
Officer there and I've been in banking for a while
as well, mostly in fair lending, UDAPT spaces as well
as audit risk management. And I'm a former examiner with
the Federal Reserve Bank as well as the chair of
the CBA Fair Responsible Banking Committee.
Speaker 2 (01:04):
Awesome, well, great for joining Thank you for joining us again.
We did this last year, so it's nice to have
you back two years in a row, so I think
interesting that being a former examiner as well, but both
of you having extensive banking experience. The environment now, both
the economic environment and kind of consumer regulatory environment is
(01:25):
rapidly changing and uncertain in a lot of ways. What
are some ways that you see banks and CBA members
working with their external partners, like a fintech partner, to
meet both regulatory expectations but also really drive innovation for
their consumers.
Speaker 4 (01:42):
Well, one way I think, just in general, I think
like partnerships right now, with a lot of uncertainty with expectations,
is that can be a fair amount of benchmarkting that
could be really helpful for a provider to kind of
come in and say, Okay, what's the view of the
industry here, and what sort of technologies might be emerging
(02:03):
use cases and things like that to kind of consider
and then kind of anyone's guess. It's anyone's guest in
terms of like will.
Speaker 3 (02:11):
This meet future regulatory expectations.
Speaker 4 (02:13):
I think there's a lot of a lot of you know,
sort of question marks there. But I think one thing
that you want to do as an institution is is
not be an outlier, right so I think it while
it's there's a little bit of a safety's number, safety
in numbers, but while that's not really the goal is
to be like Okay, we want to be like everyone else.
I think that's one kind of foundational area where I think,
(02:37):
you know, a third party or you know, a fintech
partner can come into play and.
Speaker 1 (02:43):
To adswer that. I think it also helps us with
meeting the expectations of our consumers and customers they're looking.
You know, with COVID, we really moved from more brick
and mortar to being accessible through our technology and coming
from a bank that is an online, all digital bank,
we're always trying to find the ways to bring new
products and services to our customers so that they can
(03:05):
do the research beforehand at their desk to find out
what are the differences in products or services or fees.
And then also the other thing is, you know, we
shouldn't forget that we also want to look at consultants
in the field too.
Speaker 2 (03:21):
Sorry.
Speaker 1 (03:22):
With consultants, they also bring another viewpoint. They can come
into an institution and help to make sure that you
are having that consistency with your compliance programs and oversight.
Like Nick said, you don't want to be an outlier,
and that's where sometimes you having that third party to
come in and tell you what they're seeing across the
industry is helpful as well.
Speaker 2 (03:41):
Yeah, do you think you know, I was coming a
conversation with somebody yesterday that given a little bit of
the you know, swirl with the regulatory agencies, and of
course you know, the exams from the credential regulators are
still happening, but there is some uncertainty about what's next
across the board, and they mentioned that maybe a good
opportunity to do just that, like to kind of take
(04:02):
another second look at your book, look at your practices,
go through your whole CMS program, and evaluate if there's
anything you want to do proactively yourself and to kind
of shore up what you're doing. Are you seeing member
banks doing that sort of thing, kind of saying hey,
we're going to you know, take the opportunity to spend
a little time looking inwardly.
Speaker 4 (04:24):
Yeah, And actually multiple sessions here at CBA Live discussed
at very point. I think, you know the definition of
proactive is basically doing something when there's not an urgent
kind of requirement, right, So of being reactive and so
in this time of a perceived lull, even if it's
you know, whether it's real or not, I like, yeah,
sort of taking a moment to breathe and go, okay,
(04:47):
whether the things that I can do to strengthen my
program or things that have been okay that I want
to maybe spend a little bit more time.
Speaker 1 (04:56):
And that's one of the best parts about being part
of CBA. We're having those conversations together to say, with
what is all going on in the industry? And I
like that you said swirl versus hurricane or SMORTNATO. We
are able to talk about, you know, are we changing
our programs now? Do we want to wait? When do
we have that comfort level that the regulators are now
(05:19):
settling on what the new CFPV is going to look like,
what their expectations are, or are we going to have
to again go back to really focusing in on what
our crudential is expecting of us as institutions.
Speaker 2 (05:30):
Sure, well, you know, with that swirl, tsunami, hurricane, whichever
natural disaster we want to call it, the you know,
I think certainly the rules are changing. How do you,
as going to CBA committee members think about helping your
members or staying on top of what's happening in the news.
(05:51):
I think the volume and velocity of news is almost
impossible to stay on top of. But how do you
how do you think about managing those risks and understanding
them and helping kind of distill what's happening as it
relates to fair and responsible making down to your members.
Speaker 4 (06:06):
CBA itself has a really strong team that keeps track
of what's going on in DC and beyond, and so
it really starts there, and I think they really provide
a great backbone of updates that they can provide across committees.
And so depending on the committee kind of subject matter,
then the lean in on certain updates and so that's
(06:27):
that's really I think having that foundation. While I think
you know, all the committee members get news bye and
you know, get a bunch of stuff via email or
monitoring the industry, having that consolidated view and in some
cases like a little bit of a behind the scenes
or things that you might not see in the public
about certain meetings or certain happenings is really valuable to
(06:50):
kind of go okay, this, this gives me an idea
of what might be coming next or in the next
week or month or who knows.
Speaker 3 (06:57):
So I think it starts there.
Speaker 4 (06:58):
Then that's really a platform to spur discussion about okay,
well what does this mean at across the institutions, and
maybe some have already thought about taking action or kind
of preparing.
Speaker 1 (07:12):
Absolutely, and then behind the scenes sometimes we do benchmarking.
And so Nick knows for many years I've called him
throughout the year and said, hey, what do you think
about this?
Speaker 4 (07:20):
What are you doing?
Speaker 1 (07:21):
What have you seen or her from other colleagues, And
so it's a good way for us to within the
committee and also behind the scenes to really benchmark with
each other.
Speaker 2 (07:29):
Yeah. Absolutely, So I think that like partnership is key,
especially today, and you know, I think you both know,
like you know, folks move around in the industry too,
between different organizations, So that's great that you have that
network out there. You know, as you think about like
technology innovation AI, whether it's you know, the type of
AI we use to do our underwriting and risk assessments
(07:51):
or things like generative AI, the role of a fair
lending officer or a fair responsible banking officer is getting
more complex, you really, you know, it was already a
very complex area, but now taking those rules and kind
of applying them to rapidly changing new technology, Like how
do you think about staying on top of technology developments
(08:13):
and taking kind of the crux of the regulation which
hasn't changed, and then measuring with new technologies like AI.
That's a big, light, lightweight question.
Speaker 1 (08:24):
I mean it really is, and especially coming from an
online bank where we do everything digitally to start with you,
really we are becoming more and more involved in the
process of AI machine learning in our institutions than ever before.
And it's really based on the expectation of the regulators.
They want us to make sure we're aware of what
are in our models, What are the variables in there?
(08:45):
Is there any potential risk of discrimination and if so,
how are you controlling for it? Are you changing the
variables that are in there? Are you requiring different standards
around it? So we're keeping in touch with our models
across our our across our organization as well as across
the industry. And that's where again having a platform like
(09:07):
CBA where we can come together and talk about my
regulators looking for this within examinations or how we're looking
for oversight versus a different crudential regulator that might have
a different focus. We know last year there was the
CFPEB sent out a questionnaire to multiple organizations to gather
more information on what are they doing for models and
(09:30):
oversight internally. So as we're trying to figure it out,
the regulators are trying to figure it out as well.
Speaker 4 (09:37):
Yeah, and I would add that sort of the tools
and techniques continue to evolve. I think the principles of
the challenges with AI, with the black box nature and
then now with jen ai sort of being very widespread,
and I think, you know, I think everyone probably has
a version of chat GPT or claud or something like that.
Speaker 3 (09:58):
On their phones, and so it's very accessible.
Speaker 4 (10:01):
And so I think having that discussion on you know,
some some banks may be leaning in more historically to
using AI models in more kind of high stakes scenarios
like lending, and then others aren't. So I think having
a committee to discuss those and sort of learn from
the collective group is very valuable. And so then if
(10:26):
you know, if your institution is like, Okay, we're kind
of ramping up in this area, then what does that
mean from a fair lending perspective, what sort of reviews
might be conducted, and I think that's also a pretty
big sliding scale.
Speaker 3 (10:39):
I think you know, we've.
Speaker 4 (10:40):
We've heard some from regulatory feedback or some it's a
limited public documents from prudentials and CFPB on the topic.
But there's still a lot of different, I think, ways
in which you could implement fair lending controls and risk management.
So having again have that dialogue and committee to talk
(11:03):
about those things is helpful.
Speaker 1 (11:05):
And then also to add to it, the CBA is
great and other industry trades as well where they advocate
for the banks on Capitol Hill to say the banks
want more direction, they want to have that guidance of
what your expectations are so they can implement it within
their institutions.
Speaker 2 (11:21):
Yeah, and I think that's definitely something you know, and
you think you both are aware that you know, we
work with more than one hundred banking institutions, whether it's
a bank or a credit union or more of a
banking as a service type bank provider, and so we
see and help support them through many exams with all
of their prudential regulators. And I think that that inconsistency
(11:42):
with what the different field examiners may know and what
they're comfortable with and you know they are really trying
to learn and you know, we've done a lot of work,
you know, going into the different agencies and kind of
trying to open up our doors as much as possible,
to be very transparent and to help educate and to
drive forward the understanding of AI. And we spend a
lot of time I think, as you've been thinking about
(12:04):
fair lending and have a deep team that's that's working
on fairness across you know, I think with the you know,
one of the themes that I've heard this week is
with a lot of the kind of political uncertainty and
the regulatory swirl, experienced examiners potentially leaving and the risk
(12:24):
that that can can bring. You know, can you talk
to me about maybe what what you're thinking, particularly in
an area like fair and responsible banking, where I think
the subject matter expertise has to be very deep to
be very effective at it and not just and really
sort out the signal from the noise of data. What
what do you see that having an impact on the
(12:45):
examinations If there's a kind of mass departures from the agencies.
Speaker 3 (12:52):
Yeah, I even think just.
Speaker 4 (12:54):
Even mass departure aside sort of filtering in and out
of examiners, patients, things like that, sometimes you may lose
institutional knowledge, you know, regardless of kind of fair lending expertise.
And then I think too, you think about like the
scope of fair learning exam, so it's not just an
underwriting mortgage underwriting fair learning exam every single time across
(13:17):
the country. It's it could be many different focal points.
So even even sort of like current state, there's a
bit of a sometimes a learning curve. And but yeah,
I do think that's important. I think relationships with examiners,
I of course, being being one in.
Speaker 3 (13:32):
The past, I have a soft spot there.
Speaker 4 (13:34):
And and it really is a situation where when everyone's
working together, no one likes surprises.
Speaker 3 (13:42):
It's really going to yield the best result.
Speaker 4 (13:43):
And and so I think I think telling, you know,
sort of being a being proactive with with regulators, telling
your story about your program, telling about what you've already
thought about and how you're controlling for things connectually be
a way to sort of go, hey, if I've got
my program really well laid out, that's going to be
(14:06):
easy for someone who's maybe you know, new or green,
to say, okay, now I kind of understand how to
take the regulation and how it's actually being done, and
I can kind of use that as a springboard.
Speaker 1 (14:19):
I agree. I think the relationship part is so important
with our regulators, and part of that is going to
be having to reteach them what your organization does, why
you do things a certain way, and also a little
bit of that history so that they understand. But I
think it will be it will be hard. We also
to remember it's a lot on the examiner to walk
(14:39):
into institutions and have to relearn completely different focuses, sizes,
and complexity, So we have to also remember that it's
going to take a little bit of time for our
regulators to get caught up. It does concern me a
little bit though, with the large influx of those that
are leaving at this time. As you say, fair lenning
is very complex, and so even internally in institutions, a
(15:02):
lot of times I'll have, if I have an open position,
someone who's very new to compliance wants to start unfair lending.
And I always think this is kind of where you
end or where you're in your mid at least your
midpoint of your journey for your career, because it is
very complex and you need to understand a lot of
other regulations in order to be able to apply fair
lending accurately.
Speaker 2 (15:22):
Sure, And I remember actually last year, I think we
talked about a little bit the challenges of hiring and
bringing in new employees into the fair lending space. This
could be an opportunity to hire some ex examiners, and
so there may be some senior people that landed at
many of the banks I think particularly we've seen, you know,
(15:42):
we work with a lot of more kind of regional
and community banks as well and smaller credit unions, and
I think that may be a good hiring opportunity for
them to snatch up some of those ex examiners.
Speaker 4 (15:53):
Yeah, absolutely, thinking that, I think that's sort of the
flip side and a positive because yeah, there's a lot
of really good talent across agencies and and you know,
and even just folks kind of looking for a different
opportunity to be like, hey, I've been kind of in
examination supervision for twenty years and kind of what's next. Okay,
(16:15):
well get on the bank side, you know.
Speaker 1 (16:19):
And Nick is a great example of how we can
transition into working in a bank and having a really
great career.
Speaker 2 (16:24):
Absolutely and there's so many as you mentioned, like consulting agencies.
There's a ton of firms that are out there as consultants,
particularly in the fairness space, to bring that expertise into
organizations that maybe can't build and hire a full team internally.
And we certainly see more of those and are engaging
with them too.
Speaker 1 (16:42):
In our work.
Speaker 2 (16:44):
All Right, So, I know you've both talked a lot
about the benefits of the CBA and the benefits have
done just relationships across the industry too. But you know,
what would you if you had to say what's the
biggest challenge in the past year and how being a
member of CBI and on the committee at the CBI
has helped navigate that? Like where do you know? What
would you say is the biggest benefit that you've seen
(17:06):
in helping over the past year.
Speaker 1 (17:08):
I'm going to go with my two regulations, and I'll
say CIRA and ten seventy one. Even though CIRI is
outside of our scope, it's still very close with what
we do in fair and Responsible banking. That regulation in
ten seventy one we have final rules and then organizations
are starting to implement those rig change management and then
(17:28):
it's on pause because of lawsuits or other changes right
now with the administration, when do we start, when do
we stop? And working with CBA, they've really been able
to bring us together. There are forums for ten seventy
one where anyone can pop in each week ask questions
about I'm trying to implement this field. It does not
make sense. How do I train my commercial lenders on
(17:51):
what this field means, when to collect data, when not
to collect data. So it's really been great because they
keep us all aligned better and give us that forum
to really work together and find out what concerns our
other banks having so we can try to prevent it
within our own institution.
Speaker 3 (18:08):
Yeah, that's a great one ten seventy one.
Speaker 4 (18:09):
And not only just like implementation, but just the dates,
like so what is the compliance state? So that's moved
many times and with court cases and whatnot.
Speaker 3 (18:17):
So that's again a strength of the CBA in keeping really.
Speaker 4 (18:23):
Finger on the pulse of all of those court cases
and kind of current current statuses. And so I think
there's a number of rules too that go beyond fair
and multiple banking, but the same kind of thing of
like okay, well this rule survive or will it permutate
in something else, And so that's that's really good and
really good source of information. I think every bank probably
(18:44):
talks about that in their own institutions as well, but
to have you know, more perspectives on that. And then
I think most recently with a bunch of executive orders,
and I think the question is like, okay, even though
maybe most of these do not apply to banking directly,
what's the indirect impact? And I think there's the reputation
(19:06):
risk that comes into play of like okay, well, what
are people doing? How are we interpreting this as an industry?
So that's you know, very front and center these days.
Speaker 1 (19:17):
It's a great example. I think of DEI as one
of it. It works, it aligns very closely to what
we do in very responsible banking, who we protect, which
customers as prohibited basis groups, and so it does have
also that reputational risk. How are organizations going to adjust
based on what we're seeing from executive orders?
Speaker 2 (19:35):
That's interesting, So that's maybe a good one to kind
of end on. Then, like you know, any I guess
bold predictions of what may change in your space throughout
twenty twenty five.
Speaker 3 (19:47):
I think there's going to be a change with ten
seventy one. I could see some of the I guess
so called.
Speaker 4 (19:56):
Non mandatory fields maybe getting pulled back, some of the
requirements within for monitoring of kind of no responses for
collecting information for demographics or I don't want to provide that,
so that that's kind of a new thing. And then
I think too, I think, you know, date's already been
pushed back. I think there's I don't even know what
(20:17):
the official they would be, so I think it's always
been odd with ten seventy one, like a mid year implementation.
I'm not a fan of that personally, but so I
could see that, you know, kind of getting delayed and
being changed a bit, some of it rolled back, so
that that will cause you know.
Speaker 3 (20:39):
A lot of I don't know, I don't know the
right word is, but in some.
Speaker 2 (20:45):
Maybe expense and resourcing that may not actually be implemented.
Speaker 4 (20:50):
Then yeah, I think banks will have a choice of like, hey,
we've already coded all this stuff, so then like well,
if it's if it's optional and we can still do it, fine,
maybe that's that Maybe that's cheaper and better to kind
of have those but maybe not report them. Or if
it's even permissible, right, because so for a test everyone
maybe the fields it would be legal to collect them now,
(21:11):
so there's a lot of complexity there.
Speaker 3 (21:13):
So maybe that's not really a bold prediction.
Speaker 4 (21:14):
I think it's maybe somewhat logical, but I think in
this environment, I think logic might be out the window,
you know, So, so i'd say sort of be prepared
to be surprised.
Speaker 3 (21:26):
I love the movie Dan in real life, so that's
one of my favorite quotes.
Speaker 1 (21:30):
I agree. I think we as compliance officers are used
to a lot of change, and so we're just going
to have to be prepared for even more change over
the next couple of years. But again we're here to
serve our customers to do the right thing by them,
and also serve our institutions, so with it, we will
make sure that we do work with the ebbs and
(21:50):
flows and make sure everything goes well. I think the
biggest predictions I have is again going to Siri, because
it works so closely with us, I think is going
to be vastly different once it goes through the lawsuit
and it's looked at again. And I believe you DApp
will probably have I don't know if it'll be better
to find, but I think it's going to be slightly
(22:12):
less regulated over the next couple years, and I expect
to see through our midterm election that it could change
then instead of waiting until the next four years for
a new administration. So we'll see what happens with you, DAP, CIRA,
and I think we're going to have a slightly different,
(22:32):
much smaller CFPB. I keep saying it's going to have
a facelift. It's going to be here somehow, but it's
going to look slightly different.
Speaker 2 (22:40):
Great, well, thank you. Definitely appreciate Lindsay Nick both of
you rejoining us on the podcast.
Speaker 1 (22:45):
Thank you for having us
Hello.
Speaker 2 (00:04):
This is Lynd Soderbiel and welcome to Leaders in Lending.
I'm joining you here from CBA live in Orlando, and
we have Lindsay Yusf and Nick Rustler from the Fair
and Responsible Banking Committee. Lindsay and Nick, can you introduce
yourself and tell us a little bit about your background.
Speaker 1 (00:21):
Sure, I'm Lindsay yus If. I'm the executive Compliance Director
at ALI and also the fine or the Fair and
Responsible Banking Officer. In addition, I am the vice chair
of the Fair and Responsible Banking Committee for the CBA.
So I have been in banking for about twenty four
years now and have worked in all different areas, mostly
with CIRE Fair Lending and formerly as a chief compliance officer.
Speaker 3 (00:45):
Hi.
Speaker 4 (00:45):
Nick Raisler M and T Bank Fair and Responsible Banking
Officer there and I've been in banking for a while
as well, mostly in fair lending, UDAPT spaces as well
as audit risk management. And I'm a former examiner with
the Federal Reserve Bank as well as the chair of
the CBA Fair Responsible Banking Committee.
Speaker 2 (01:04):
Awesome, well, great for joining Thank you for joining us again.
We did this last year, so it's nice to have
you back two years in a row, so I think
interesting that being a former examiner as well, but both
of you having extensive banking experience. The environment now, both
the economic environment and kind of consumer regulatory environment is
(01:25):
rapidly changing and uncertain in a lot of ways. What
are some ways that you see banks and CBA members
working with their external partners, like a fintech partner, to
meet both regulatory expectations but also really drive innovation for
their consumers.
Speaker 4 (01:42):
Well, one way I think, just in general, I think
like partnerships right now, with a lot of uncertainty with expectations,
is that can be a fair amount of benchmarkting that
could be really helpful for a provider to kind of
come in and say, Okay, what's the view of the
industry here, and what sort of technologies might be emerging
(02:03):
use cases and things like that to kind of consider
and then kind of anyone's guess. It's anyone's guest in
terms of like will.
Speaker 3 (02:11):
This meet future regulatory expectations.
Speaker 4 (02:13):
I think there's a lot of a lot of you know,
sort of question marks there. But I think one thing
that you want to do as an institution is is
not be an outlier, right so I think it while
it's there's a little bit of a safety's number, safety
in numbers, but while that's not really the goal is
to be like Okay, we want to be like everyone else.
I think that's one kind of foundational area where I think,
(02:37):
you know, a third party or you know, a fintech
partner can come into play and.
Speaker 1 (02:43):
To adswer that. I think it also helps us with
meeting the expectations of our consumers and customers they're looking.
You know, with COVID, we really moved from more brick
and mortar to being accessible through our technology and coming
from a bank that is an online, all digital bank,
we're always trying to find the ways to bring new
products and services to our customers so that they can
(03:05):
do the research beforehand at their desk to find out
what are the differences in products or services or fees.
And then also the other thing is, you know, we
shouldn't forget that we also want to look at consultants
in the field too.
Speaker 2 (03:21):
Sorry.
Speaker 1 (03:22):
With consultants, they also bring another viewpoint. They can come
into an institution and help to make sure that you
are having that consistency with your compliance programs and oversight.
Like Nick said, you don't want to be an outlier,
and that's where sometimes you having that third party to
come in and tell you what they're seeing across the
industry is helpful as well.
Speaker 2 (03:41):
Yeah, do you think you know, I was coming a
conversation with somebody yesterday that given a little bit of
the you know, swirl with the regulatory agencies, and of
course you know, the exams from the credential regulators are
still happening, but there is some uncertainty about what's next
across the board, and they mentioned that maybe a good
opportunity to do just that, like to kind of take
(04:02):
another second look at your book, look at your practices,
go through your whole CMS program, and evaluate if there's
anything you want to do proactively yourself and to kind
of shore up what you're doing. Are you seeing member
banks doing that sort of thing, kind of saying hey,
we're going to you know, take the opportunity to spend
a little time looking inwardly.
Speaker 4 (04:24):
Yeah, And actually multiple sessions here at CBA Live discussed
at very point. I think, you know the definition of
proactive is basically doing something when there's not an urgent
kind of requirement, right, So of being reactive and so
in this time of a perceived lull, even if it's
you know, whether it's real or not, I like, yeah,
sort of taking a moment to breathe and go, okay,
(04:47):
whether the things that I can do to strengthen my
program or things that have been okay that I want
to maybe spend a little bit more time.
Speaker 1 (04:56):
And that's one of the best parts about being part
of CBA. We're having those conversations together to say, with
what is all going on in the industry? And I
like that you said swirl versus hurricane or SMORTNATO. We
are able to talk about, you know, are we changing
our programs now? Do we want to wait? When do
we have that comfort level that the regulators are now
(05:19):
settling on what the new CFPV is going to look like,
what their expectations are, or are we going to have
to again go back to really focusing in on what
our crudential is expecting of us as institutions.
Speaker 2 (05:30):
Sure, well, you know, with that swirl, tsunami, hurricane, whichever
natural disaster we want to call it, the you know,
I think certainly the rules are changing. How do you,
as going to CBA committee members think about helping your
members or staying on top of what's happening in the news.
(05:51):
I think the volume and velocity of news is almost
impossible to stay on top of. But how do you
how do you think about managing those risks and understanding
them and helping kind of distill what's happening as it
relates to fair and responsible making down to your members.
Speaker 4 (06:06):
CBA itself has a really strong team that keeps track
of what's going on in DC and beyond, and so
it really starts there, and I think they really provide
a great backbone of updates that they can provide across committees.
And so depending on the committee kind of subject matter,
then the lean in on certain updates and so that's
(06:27):
that's really I think having that foundation. While I think
you know, all the committee members get news bye and
you know, get a bunch of stuff via email or
monitoring the industry, having that consolidated view and in some
cases like a little bit of a behind the scenes
or things that you might not see in the public
about certain meetings or certain happenings is really valuable to
(06:50):
kind of go okay, this, this gives me an idea
of what might be coming next or in the next
week or month or who knows.
Speaker 3 (06:57):
So I think it starts there.
Speaker 4 (06:58):
Then that's really a platform to spur discussion about okay,
well what does this mean at across the institutions, and
maybe some have already thought about taking action or kind
of preparing.
Speaker 1 (07:12):
Absolutely, and then behind the scenes sometimes we do benchmarking.
And so Nick knows for many years I've called him
throughout the year and said, hey, what do you think
about this?
Speaker 4 (07:20):
What are you doing?
Speaker 1 (07:21):
What have you seen or her from other colleagues, And
so it's a good way for us to within the
committee and also behind the scenes to really benchmark with
each other.
Speaker 2 (07:29):
Yeah. Absolutely, So I think that like partnership is key,
especially today, and you know, I think you both know,
like you know, folks move around in the industry too,
between different organizations, So that's great that you have that
network out there. You know, as you think about like
technology innovation AI, whether it's you know, the type of
AI we use to do our underwriting and risk assessments
(07:51):
or things like generative AI, the role of a fair
lending officer or a fair responsible banking officer is getting
more complex, you really, you know, it was already a
very complex area, but now taking those rules and kind
of applying them to rapidly changing new technology, Like how
do you think about staying on top of technology developments
(08:13):
and taking kind of the crux of the regulation which
hasn't changed, and then measuring with new technologies like AI.
That's a big, light, lightweight question.
Speaker 1 (08:24):
I mean it really is, and especially coming from an
online bank where we do everything digitally to start with you,
really we are becoming more and more involved in the
process of AI machine learning in our institutions than ever before.
And it's really based on the expectation of the regulators.
They want us to make sure we're aware of what
are in our models, What are the variables in there?
(08:45):
Is there any potential risk of discrimination and if so,
how are you controlling for it? Are you changing the
variables that are in there? Are you requiring different standards
around it? So we're keeping in touch with our models
across our our across our organization as well as across
the industry. And that's where again having a platform like
(09:07):
CBA where we can come together and talk about my
regulators looking for this within examinations or how we're looking
for oversight versus a different crudential regulator that might have
a different focus. We know last year there was the
CFPEB sent out a questionnaire to multiple organizations to gather
more information on what are they doing for models and
(09:30):
oversight internally. So as we're trying to figure it out,
the regulators are trying to figure it out as well.
Speaker 4 (09:37):
Yeah, and I would add that sort of the tools
and techniques continue to evolve. I think the principles of
the challenges with AI, with the black box nature and
then now with jen ai sort of being very widespread,
and I think, you know, I think everyone probably has
a version of chat GPT or claud or something like that.
Speaker 3 (09:58):
On their phones, and so it's very accessible.
Speaker 4 (10:01):
And so I think having that discussion on you know,
some some banks may be leaning in more historically to
using AI models in more kind of high stakes scenarios
like lending, and then others aren't. So I think having
a committee to discuss those and sort of learn from
the collective group is very valuable. And so then if
(10:26):
you know, if your institution is like, Okay, we're kind
of ramping up in this area, then what does that
mean from a fair lending perspective, what sort of reviews
might be conducted, and I think that's also a pretty
big sliding scale.
Speaker 3 (10:39):
I think you know, we've.
Speaker 4 (10:40):
We've heard some from regulatory feedback or some it's a
limited public documents from prudentials and CFPB on the topic.
But there's still a lot of different, I think, ways
in which you could implement fair lending controls and risk management.
So having again have that dialogue and committee to talk
(11:03):
about those things is helpful.
Speaker 1 (11:05):
And then also to add to it, the CBA is
great and other industry trades as well where they advocate
for the banks on Capitol Hill to say the banks
want more direction, they want to have that guidance of
what your expectations are so they can implement it within
their institutions.
Speaker 2 (11:21):
Yeah, and I think that's definitely something you know, and
you think you both are aware that you know, we
work with more than one hundred banking institutions, whether it's
a bank or a credit union or more of a
banking as a service type bank provider, and so we
see and help support them through many exams with all
of their prudential regulators. And I think that that inconsistency
(11:42):
with what the different field examiners may know and what
they're comfortable with and you know they are really trying
to learn and you know, we've done a lot of work,
you know, going into the different agencies and kind of
trying to open up our doors as much as possible,
to be very transparent and to help educate and to
drive forward the understanding of AI. And we spend a
lot of time I think, as you've been thinking about
(12:04):
fair lending and have a deep team that's that's working
on fairness across you know, I think with the you know,
one of the themes that I've heard this week is
with a lot of the kind of political uncertainty and
the regulatory swirl, experienced examiners potentially leaving and the risk
(12:24):
that that can can bring. You know, can you talk
to me about maybe what what you're thinking, particularly in
an area like fair and responsible banking, where I think
the subject matter expertise has to be very deep to
be very effective at it and not just and really
sort out the signal from the noise of data. What
what do you see that having an impact on the
(12:45):
examinations If there's a kind of mass departures from the agencies.
Speaker 3 (12:52):
Yeah, I even think just.
Speaker 4 (12:54):
Even mass departure aside sort of filtering in and out
of examiners, patients, things like that, sometimes you may lose
institutional knowledge, you know, regardless of kind of fair lending expertise.
And then I think too, you think about like the
scope of fair learning exam, so it's not just an
underwriting mortgage underwriting fair learning exam every single time across
(13:17):
the country. It's it could be many different focal points.
So even even sort of like current state, there's a
bit of a sometimes a learning curve. And but yeah,
I do think that's important. I think relationships with examiners,
I of course, being being one in.
Speaker 3 (13:32):
The past, I have a soft spot there.
Speaker 4 (13:34):
And and it really is a situation where when everyone's
working together, no one likes surprises.
Speaker 3 (13:42):
It's really going to yield the best result.
Speaker 4 (13:43):
And and so I think I think telling, you know,
sort of being a being proactive with with regulators, telling
your story about your program, telling about what you've already
thought about and how you're controlling for things connectually be
a way to sort of go, hey, if I've got
my program really well laid out, that's going to be
(14:06):
easy for someone who's maybe you know, new or green,
to say, okay, now I kind of understand how to
take the regulation and how it's actually being done, and
I can kind of use that as a springboard.
Speaker 1 (14:19):
I agree. I think the relationship part is so important
with our regulators, and part of that is going to
be having to reteach them what your organization does, why
you do things a certain way, and also a little
bit of that history so that they understand. But I
think it will be it will be hard. We also
to remember it's a lot on the examiner to walk
(14:39):
into institutions and have to relearn completely different focuses, sizes,
and complexity, So we have to also remember that it's
going to take a little bit of time for our
regulators to get caught up. It does concern me a
little bit though, with the large influx of those that
are leaving at this time. As you say, fair lenning
is very complex, and so even internally in institutions, a
(15:02):
lot of times I'll have, if I have an open position,
someone who's very new to compliance wants to start unfair lending.
And I always think this is kind of where you
end or where you're in your mid at least your
midpoint of your journey for your career, because it is
very complex and you need to understand a lot of
other regulations in order to be able to apply fair
lending accurately.
Speaker 2 (15:22):
Sure, And I remember actually last year, I think we
talked about a little bit the challenges of hiring and
bringing in new employees into the fair lending space. This
could be an opportunity to hire some ex examiners, and
so there may be some senior people that landed at
many of the banks I think particularly we've seen, you know,
(15:42):
we work with a lot of more kind of regional
and community banks as well and smaller credit unions, and
I think that may be a good hiring opportunity for
them to snatch up some of those ex examiners.
Speaker 4 (15:53):
Yeah, absolutely, thinking that, I think that's sort of the
flip side and a positive because yeah, there's a lot
of really good talent across agencies and and you know,
and even just folks kind of looking for a different
opportunity to be like, hey, I've been kind of in
examination supervision for twenty years and kind of what's next. Okay,
(16:15):
well get on the bank side, you know.
Speaker 1 (16:19):
And Nick is a great example of how we can
transition into working in a bank and having a really
great career.
Speaker 2 (16:24):
Absolutely and there's so many as you mentioned, like consulting agencies.
There's a ton of firms that are out there as consultants,
particularly in the fairness space, to bring that expertise into
organizations that maybe can't build and hire a full team internally.
And we certainly see more of those and are engaging
with them too.
Speaker 1 (16:42):
In our work.
Speaker 2 (16:44):
All Right, So, I know you've both talked a lot
about the benefits of the CBA and the benefits have
done just relationships across the industry too. But you know,
what would you if you had to say what's the
biggest challenge in the past year and how being a
member of CBI and on the committee at the CBI
has helped navigate that? Like where do you know? What
would you say is the biggest benefit that you've seen
(17:06):
in helping over the past year.
Speaker 1 (17:08):
I'm going to go with my two regulations, and I'll
say CIRA and ten seventy one. Even though CIRI is
outside of our scope, it's still very close with what
we do in fair and Responsible banking. That regulation in
ten seventy one we have final rules and then organizations
are starting to implement those rig change management and then
(17:28):
it's on pause because of lawsuits or other changes right
now with the administration, when do we start, when do
we stop? And working with CBA, they've really been able
to bring us together. There are forums for ten seventy
one where anyone can pop in each week ask questions
about I'm trying to implement this field. It does not
make sense. How do I train my commercial lenders on
(17:51):
what this field means, when to collect data, when not
to collect data. So it's really been great because they
keep us all aligned better and give us that forum
to really work together and find out what concerns our
other banks having so we can try to prevent it
within our own institution.
Speaker 3 (18:08):
Yeah, that's a great one ten seventy one.
Speaker 4 (18:09):
And not only just like implementation, but just the dates,
like so what is the compliance state? So that's moved
many times and with court cases and whatnot.
Speaker 3 (18:17):
So that's again a strength of the CBA in keeping really.
Speaker 4 (18:23):
Finger on the pulse of all of those court cases
and kind of current current statuses. And so I think
there's a number of rules too that go beyond fair
and multiple banking, but the same kind of thing of
like okay, well this rule survive or will it permutate
in something else, And so that's that's really good and
really good source of information. I think every bank probably
(18:44):
talks about that in their own institutions as well, but
to have you know, more perspectives on that. And then
I think most recently with a bunch of executive orders,
and I think the question is like, okay, even though
maybe most of these do not apply to banking directly,
what's the indirect impact? And I think there's the reputation
(19:06):
risk that comes into play of like okay, well, what
are people doing? How are we interpreting this as an industry?
So that's you know, very front and center these days.
Speaker 1 (19:17):
It's a great example. I think of DEI as one
of it. It works, it aligns very closely to what
we do in very responsible banking, who we protect, which
customers as prohibited basis groups, and so it does have
also that reputational risk. How are organizations going to adjust
based on what we're seeing from executive orders?
Speaker 2 (19:35):
That's interesting, So that's maybe a good one to kind
of end on. Then, like you know, any I guess
bold predictions of what may change in your space throughout
twenty twenty five.
Speaker 3 (19:47):
I think there's going to be a change with ten
seventy one. I could see some of the I guess
so called.
Speaker 4 (19:56):
Non mandatory fields maybe getting pulled back, some of the
requirements within for monitoring of kind of no responses for
collecting information for demographics or I don't want to provide that,
so that that's kind of a new thing. And then
I think too, I think, you know, date's already been
pushed back. I think there's I don't even know what
(20:17):
the official they would be, so I think it's always
been odd with ten seventy one, like a mid year implementation.
I'm not a fan of that personally, but so I
could see that, you know, kind of getting delayed and
being changed a bit, some of it rolled back, so
that that will cause you know.
Speaker 3 (20:39):
A lot of I don't know, I don't know the
right word is, but in some.
Speaker 2 (20:45):
Maybe expense and resourcing that may not actually be implemented.
Speaker 4 (20:50):
Then yeah, I think banks will have a choice of like, hey,
we've already coded all this stuff, so then like well,
if it's if it's optional and we can still do it, fine,
maybe that's that Maybe that's cheaper and better to kind
of have those but maybe not report them. Or if
it's even permissible, right, because so for a test everyone
maybe the fields it would be legal to collect them now,
(21:11):
so there's a lot of complexity there.
Speaker 3 (21:13):
So maybe that's not really a bold prediction.
Speaker 4 (21:14):
I think it's maybe somewhat logical, but I think in
this environment, I think logic might be out the window,
you know, So, so i'd say sort of be prepared
to be surprised.
Speaker 3 (21:26):
I love the movie Dan in real life, so that's
one of my favorite quotes.
Speaker 1 (21:30):
I agree. I think we as compliance officers are used
to a lot of change, and so we're just going
to have to be prepared for even more change over
the next couple of years. But again we're here to
serve our customers to do the right thing by them,
and also serve our institutions, so with it, we will
make sure that we do work with the ebbs and
(21:50):
flows and make sure everything goes well. I think the
biggest predictions I have is again going to Siri, because
it works so closely with us, I think is going
to be vastly different once it goes through the lawsuit
and it's looked at again. And I believe you DApp
will probably have I don't know if it'll be better
to find, but I think it's going to be slightly
(22:12):
less regulated over the next couple years, and I expect
to see through our midterm election that it could change
then instead of waiting until the next four years for
a new administration. So we'll see what happens with you, DAP, CIRA,
and I think we're going to have a slightly different,
(22:32):
much smaller CFPB. I keep saying it's going to have
a facelift. It's going to be here somehow, but it's
going to look slightly different.
Speaker 2 (22:40):
Great, well, thank you. Definitely appreciate Lindsay Nick both of
you rejoining us on the podcast.
Speaker 1 (22:45):
Thank you for having us
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