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The Regulator’s Impact: UK vs. US: Comparison of Convergent Approaches

Regulatory changes in recent years have meant that the power and approach of both the US CFPB (Consumer Financial Protection Bureau) and the UK FCA (Financial Conduct Authority) have continued to expand and gain breadth. As a consulting services firm that works in both markets, we have seen growing similarities in tactics from these regulators on each side of the Atlantic, which suggest that each is learning from the other and adapting policies and approaches as the industry changes and further “discrepancies” are found.

For each regulator, a key focus is consumer treatment. There is an expectation of fairness, transparency, and open competitiveness. In implementing this focus, both regulators are placing great importance on firms having an effective compliance management system in place to evidence appropriate treatment of customers and to diagnose root cause for any conduct failings.

In this white paper, we examine each of the CFPB’s and the FCA’s approaches to enforcement and how they deal with regulatory enforcement. We then analyze trends in enforcement actions over the last five years to identify where their efforts appear to be merging and where they differ. Lastly, we provide best practices as it relates to managing operational risk which can be utilized in either the US or UK to enhance regulatory compliance and control to meet increasingly stringent expectations.

Category: Compliance