Keeping Pace with Risk Mitigation and Regulatory Changes

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You're listening to Leaders and Lending from
Upstart, a podcast dedicated to helping consumer

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lenders grow their programs and improve their
product offerings. Each week, here,

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decision makers in the finance industry offer
insights into the future of the lending industry,

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best practices around digital transformation, and
more. Let's get into the show

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well from the leaders in lending today. I am joined live and in person.

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Wonderful to do that with by Aaron
Rikowski from West BANKO and Jen Rugierre.

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I got that right, M ANDT
Bank from the CFPB Committee of the

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CBA. So there we go.
So I guess we're gonna talk about,

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Yeah, should we do it?
You guys? You guys have had your

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meeting with the committee, so I'm
curious what are the topics for most top

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of mind for the committee these days? Like what's so like going on in

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the world of banking. Some of
it is I think distracted from conversations around

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the CFPB, at least temporarily,
but I know it's still top of mind

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for you guys. What are the
topics of conversation when you guys get together?

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Pace of change, you know,
and it seems like quickly monthly we're

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getting some new type of guide dale
speed and unforced match in the supervisory life.

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I think of that nature about where
the bureau is signaling to us,

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where they are looking, where they
have priorities, and you know, it's

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coming fast and furious. How do
we react to that and what are the

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actions right and where are they coming
from? How are they letting us know?

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You know, we'll see something on
the blog post that we'll see a

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supervisory highlights dock from, and then
we'll see something that comes out at an

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advisory or a circular all of games
non formal rules. Yep, it's something

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that we have to look at,
evaluate and respond to. And just the

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pace posts come in, they don't
have a fine timeline. You have to

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comment by this period. You have
to have commines by this state. It's

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mandatory by this state. It's just
almost the wild West from our regulatory perspective.

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It's coming fast, furious, and
we're kinderous onto And does that feel

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demonstrablely different? Years have been in
the industry for a while, does it

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feel demonstrably different than is that the
common thing over the history of this If

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people here that a shift in how
do you feel like information is flowing out

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in a more recent time period.
I think the pace is more rapid than

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we've seen in the past. And
forgetting they'd always need different tools available to

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that and be at enough couch.
I do always sort of been able to

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read a t looks reached all its
various and means in which they communicate,

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which is helpful. A lot of
instances, you said, I lead,

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the piece is different, bamit to
Biden, No, I agree. I

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think the paces are lot It is
a lot faster. There's a lot more

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change that's being signaled through these different
through these different pronouncements. And let's face

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it, the world writing process it
takes time so well, a lot of

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times intentionally right exactly. I mean
that there's a lot of comment. There's

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time to evaluate all the comments,
it's looking at the proposals, it's looking

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at the final rules, implementation timelines. They're they've been very aggressive over the

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last several years, and I think
they have a lot they would accomplish.

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And what best way for them to
try to move that needle without going through

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that long du process is through advisories, through supervisory highlights, through since in

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orders or other other tools of band
interested. Do you think there's an element

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of the political timeline. I mean
there's elections coming up before long. The

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director is not permanent as permanent position, they can be fired it will.

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I mean like I think a little
bit of like what can we sneak what

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can we get done at the time
we have left before Maybe there's a changing

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of the guard. I don't know
if that's driving some of the pace.

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I think each director has things they
want to apoplish, right for sure,

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and you know defense about the same
mission, right, what's right by our

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huston verse? Yeah, I'm so, you know up to that point though

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these front over roll make things and
things tape alout for event one may have

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the positions, do you want to
use the different tools available to drive their

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policy and what they was the right
to do from a consumer protections get point.

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So I think it's to be expected, you know where that changes when

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you weren't the leadership changes. It
does so though then potentially when they're not

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formal rules, right, we have
to and okay, now what is this

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next? Leaders priorities and in some
kind of sec and especially if there's a

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change in administration from one party the
next it's more customary with this agency,

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the director steps down because they know
that the new administration is going to help

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point their own director. So and
Gen's absolutely right. I mean, everything

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that they're doing now can be easily
undone by someone from the other side of

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the political spectrum. So as bankers, we have to look at that and

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evaluate how that's going to be,
how that's going to change. Yeah in

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twenty twenty four. Yeah, there's
some things they're doing the formal rulemaking process.

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The many that are they're a little
less, the little less, so

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it's a little little. The other
one of the other copics of conversation I

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know you guys have was around the
clarity of expectations being conveyed. Talk to

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me about it. How that kind
of clarity or lack of clarity on exactly

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what are the expectations are impacts the
way you think about responding you're dealing with

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those things as a bank I think
depending on the topic, we do get

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a lot of mixed signals, and
I think you know, with the Bureau

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may sit in one of the other
layers of complexity. The Bureau may signal

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one position on a particular topic,
while our predential regulators who still have some

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compliance oversight of our resurtans even though
we're larger. They we have another take

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on it. So we're evaluating what's
the best strategy, Which master do we

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serve, you know, which which
interpretation trumps And there isn't a lot of

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clarity. Sometimes we see we'll see
pivoting back and forth or different messaging even

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from the bureau related to the same
topics. You know, overdraft has always

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been one where they'll say one thing
and then they'll see something a little bit

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different there next pronouncement. Then they'll
go back to the friar when the next

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on this release information on that topic. But it's really hard for us to

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nail down exactly what they want us
to do. At some points, you

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know that they want us to take
this new interpretation and roll it forward.

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There's been times where they tell us, okay, we have a new interpretation,

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now you need to look back and
retroactively apply that. That's very difficult

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for us, and if they do
that for five years, they don't there's

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no clear standard on this, and
we're as compliance officers. We've always been

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to the historically very good that you
tell us a rule whether if we like

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it or not. You tell us
a rule, would you tell us the

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standard, You tell us the timeline, we'll put it, replace them,

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We'll do it. But this mixed
messaging and in consistent messaging is harder for

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us as bankers to deal with as
compliance officers to explain relations things pre ban

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Sorry, it really is, um. You know if his errand said,

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we want to do the right thing
by our customers first and foregops, for

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sure, we want to follows right, we want to do what is expected

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of us, and so U sometiops
lack a clarity rate prevents us with no,

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it weren't debt is in other people's
mind self? Um, you know,

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it makes it hard for us to
always desirable solution that will last respond

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to what's being How do you think
about building out a compliance organization or internal

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policies processes that deal with that kind
of environment? I mean it feels like

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interesting question for you, not just
from the CFP committee point of view,

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but from like your internal roles and
compliance you know, in risk or compliancy,

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how do we actually think about operationalizing
or building a team and building an

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approach that allows us to adapt to
what seems to be somewhat changing environments,

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like how do you deal with that
personally? Within the organizations? It just

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feels like an interesting challenge, a
little bit different than the way traditionally compliance

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roles have operated with a little bit
more set rules and expectations. Let you

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take this one course, very different
scale organizations, So this might be a

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questing. You know, all is
keeping in my between always keeping aligne.

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Let's do the right thing. Let's
do the right thing by the customer.

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What's the first way to leverage data? We obviously have a lot more an

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ability to leverage data and identified risks
so on. I would say one if

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it things though, you know now
the directions or the luship. But one

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of the things that I find challenging, and I think a lot of the

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folks in many kind challenging is the
impact on the tios and the human capital

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element of it leaving uh. You
know, our heavy folks constantly pivot to

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the next thing, and they're always
be potentially the last fire drow to deal

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with, you know, katol up
at latins until keeping focused on all them

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good we're doing for the consumer,
for the bank, you know, the

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value we're adding and keeping that pop
front of mind. And you know,

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we can't solve every problem at what's
so let's tackle all thet we go out,

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let's make it impact, Let's do
the right thing. And so keeping

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that message and keeping that teen positive
and focused is also really important, you

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know, regulatory divider mat that is
I am yea and I think from my

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same bord too, is ingesting it
as a compliance organizage and keeping our team,

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you know, engage and keeping them
from getting all this burnt out,

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with all the with the pace of
change. And for me, it's not

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only that, it's how do we
disseminate this information to the right leaders as

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the organization. Yeah, how do
we take this information? We can do

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and if we want with it our
clients organization, we can afford it.

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We can tell our board management,
Hey, this is this is what's common.

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This is how they're interbreting things.
But unless we get it down into

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the leadership of our business lines that
are dealing with our consumers and making product

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decisions of work lef, it's on
implementing these changes, you know, it

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really doesn't matter. So having a
strategy to get that information across the organization

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into the right people's hands in a
way that is going to be meaningful for

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them, that they can understand it
and to the best of our ability clarify

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what base new or change regulatory expect
emitions are. It's absolutely critical to navigating

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this pace of change, in this
style of change. Really, I would

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also add understooding the business, really
understanding how they out how they serve our

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customers, and having risk people to
really a deep understanding of that to help

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them solve. But you really parked
there with those business folks and helping we

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beat the regulatory expectations but help our
customers and also stay within the business live

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intel of that level of integration,
that level of product knowledge is become more

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and more import from a risk perspective. But maybe ten years ago when you

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know, knowing the rules and yeah, not beating as good. Granted it

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was there out way business house.
Yeah. The other thing that occursed me

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And it's interesting, it was a
learning for me coming from the technology space

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into the banking you know space,
Like I kind of expected there to be

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easy, just rules like is this
a lot? Yes, No, you

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realize it's more like if I do
ask how much of a risk am I

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taking? There's someone that's like no
risk, and there's someone like, well,

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you're likely to go to jail if
you do that. But the vast

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majority falls somewhere in the middle where
it's like, well, it's not like

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a black and white there's a lot
of areas that are a little bit gray.

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And I think that figuring out how
to work with business owners across the

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organization and help them understand where in
the shades of gray they can be and

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how that lines up with business priorities
or other expectations, and where are we

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comfortable taking a little more risk and
where we comfortable taking a little less risk.

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That's interesting because I think so often
the lines of business just want like

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can I do this? They want
to, They want to yes, no,

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And the answer is like maybe,
well that's risk probably okay if you

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do these other things as well.
And I think I'm curious how you think

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about managing that grayness across the organization, that kind of if not a clear

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yes or no, there's like,
this is a risk, here's some mitigation

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strategies you could take. How big
a risk? Well, I gotta find

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some way to quantify or help you
understand it. It's like it's very different

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than it just yes, good,
no bad, simple answer, And I

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think it has to go down the
line of business to be well executed.

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Right, how do I think about
making trade offs between business, between risks

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and the compliance side, between mitigation
strategies I could take, how do you

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think about integrating it and like kind
of pushing that all through the through organizations.

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I feel like that's just such a
critical thing these days and very different

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to your point than maybe Weston or
fifteen years ago. I would say,

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you know, and the wents starting
there, our business leaders from the top

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twelve um are really sending the right
messages around risk and risk management. And

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I would say more than ever,
the business books are as educated on risk

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as anyone else. Right, So
it's out there's most management, and here

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here's product folks. Right, those
product folks are really as educated as risks.

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So the discussions I find to be
pretty easy. As a business.

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Here's what the rule is, let's
collectively make these decisions. You know are

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usually and you know, a group
of belides, the defense at the table,

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the business partners, and really when
we talk to things, it's rare

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and I reaching experience that there's disagreement
on what the red tap is so um

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it's been i'd say, such a
level of education and you know the message

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from the top of the house or
managements, you know is important and it's

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one of our strategic comparatives. So
I think that is at the key.

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Yeah, and I think looking at
where the where the change is coming in

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the regulatory landscape, but where it
has been coming, there is a lot

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that is black and white. You
look at most traditional regulations, you look

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at look at trip right when that
came out, Thou shalt calculate this way

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and thou shalt disclose this way,
either doing it right or not. Ye.

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I mean there's there's not much gray
area in the rules like that,

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or when you're collecting home to data
or when ten seventy one drops later.

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This we collect, this is how
we have to This is what we have

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to collect, and this is what
we need to do. The gray area

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comes into the responsible bank in a
fair landing, in TVWDAPP and where a

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lot of the Bureau's current current focus
is. That's where I think our risks.

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Our business high leaders to gents BLAF, I really think they are starting

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to understand more than ever what those
risks are and how things that we're doing

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could be perceived. And you know, in twenty plus years, I've never

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sat in a room where people are
trying to figure out what's the most we

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can get out of a consumer.
It's always what is the best us for

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our consumer? How can they understand
this, what's the right trade off for

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this? How can we make this
product better for them to make them want

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to come back with us, and
having them understand the perception of what we're

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doing. It's in an all time
high from what I'm experiencing as well.

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They really do grasp and are starting
to grasp what potential could be unfair or

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what an agency could say is deceptive. And when they're building and designing the

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products, they're being very thoughtful of
you making sure consumers are getting a good

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value for any fees or for the
services we're provided. Yeah, I'll on

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that point because it's one of the
things that's come up. One of the

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themes there that's called with a lot
of my conversations is having the compliance and

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risk conversation early in the product.
But it's like, don't don't finish the

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project and then center it over for
the stamp of approval with the like yes,

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no, do we do it right? Like how that be an ongoing

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dialogue either with aligned business owner that's
that's savvy about the risk involved, but

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also with the compliance seems risk as
you're developing a product rejected strategy of marketing,

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missus, that's not like finish the
whole thing and then toss over the

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fence and hope it comes back stamped. Yeah, let's let's iterate on this

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and build it together, because then
we can get to a probably a better

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place. So just like the kind
of like separate houses. Uh, it

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not non iterative like just waterfall thing. I know, you guys. It

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also mentioned the topic of fair banking
and credit reporting is a topic that came

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talking about what's uh, what is
the copic of discussion there? What's going

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on in that space? A lot
what Aaron mentioned right, there's a lot

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of focus there. So those are
the places we're seeing a lot of guidance

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um paths. It's a commistry.
Credit reporting is very of course and uh

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you know it is extremely complex.
So that's streetway data driven and so just

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a focus said and that you know
from a consumer stampoint and making sure you

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know, I think euros a regulator
stamp point that you know, there's matt

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negative impacts to consumers and following and
it's chime otis. Yeah. I always

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feel like just that there's the consumer
protection side of rulemaking, and then there's

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a like when an institution actually internalizes
that, what happens to the availability of

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pricing of credit because of that?
Because the first thing you do is why

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I get I got to restrict access
to credit because I mean, my risk

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has increased or my revenues decreased.
And so I do think understanding those impacts

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is really important because it changes the
nature of what the real impact of regulations,

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what rulemaking can be, and cutter
reportings. Ever since the bureau has

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been around, has always been a
hot topic and it's always a hot hot

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topic with consumers. That's one of
the leading if not looked at it in

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a while, but if not,
the leading source of complaints in the CFPB

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conplaint well is credit reporting. And
it's something that as banks were furnishers,

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so we have in its simplest term, one responsibility and obligation or FCR report

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accurately. That's it. We don't
ever have to report, but if we

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do, it's going to be accurate, But once that data leaves us,

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it has absolutely bureaus. It goes
into their black box, and consumers don't

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understand the impact that something that is
going on with one of the major credit

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bureaus has on their scores, whether
it's untilization rate, whether it's an inquiry,

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whether it's something that happens completely unrelated
to us, or something that we've

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dealt with with some of our customers. Why did one of my scores go

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down but the other two didn't And
we don't have an answer to that.

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We report the same thing to all
bureros, but that's still a pain point

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for a customer. Well, even
their scores are different among the bureaus,

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go why, Well, it's just
not a great answer, and you don't

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have any insight into that. No, we don't know. We can't tell

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them why their score was eight hundred
for a car loan and seven fifty six

263
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for a mortgage. You're depending on
what products they get, their score could

264
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be different with the same beer,
say yeah, for sure. Is there

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any discussion of the some of the
newer products I think BNPL here in particular,

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that are not currently furnishing, and
yet I would argue in many cases

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represent a substantial enough payment obligation on
behalf the consumer that when you're thinking about

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pulling credit as a credit underwriting group, you're going, I would like to

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know that these obligations are on this
like that were alone, I would know

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that there was a two hundred alarm
unt payment that was due, that it

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would impact my my assessment of credit
worthy despability to repay. And yet those

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things are being reported often to the
bureaus. It was that sept in a

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topic of conversation, not so much, I get I'll have to call the

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credit people and see if they're they're
talking about that. That could help us

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make more informed decisions when we're looking
at it, for sure, and they

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could also help consumers. You're talking
about there's a lot of people that are,

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you know, blind your credit line. They're not. They're credit invisible

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because they're financing thrilled by now pay
later, And if they don't pay their

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by now pay later place, I
bet that they won't hesitate to file a

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judgment and that will negatively impact their
credit. Ye. So if they have

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the ability to negatively impact credit,
as you should have to be able,

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they should positive report possibly. Yeah, there's certainly a movement I see underfoot

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for more of the large payment obligations
to be listen. I mean, like

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your cell phone bill, let's off
not credit your rent utilities which you can

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aren't credit, but they're like consistently
paying those is a good indication. And

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something that like is on is it
superly valuable information from people making credit because

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rent is I own a house,
my mortgage payments get reported. If I

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don't own a house, my rent
payments, which are basically the same thing,

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don't get reported. And that just
seems and there's ways obviously there are

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bureaus of reports US, but it's
not commonly available right that. It's a

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topic I know on the underwriting side, because well, it's would help me

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get access to consumers that don't have
thick files. And young consumers now are

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like very likely to stick with debit
cards instead of credit cards. And I

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talked to some of them. They
go, why I don't want to give

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myself the trouble to the credit card, Draff. I know, but you

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realize if you don't put anything on
credit when you want to buy a car,

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you're gonna have no credit history.
Here I can have a credit score

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that qualifies you for a loan,
and they're like, I didn't know better.

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Good get that credit card. It
is paid off. Let's pay it

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off everyone. Are there changes?
Or when you look at this landscape,

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what are the things you advice you
would give to banks about how I prepare

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what's coming ahead? How do I
lay the foundation for being adopted? Like,

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what's the advice you would give to
bankers in the space we're trying to

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be ready for, you know,
the world that's coming ahead of us the

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next couple of years. I would
say, just simply breathe. There is

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change coming. But we can't breathe. We can't seod advice. Okay,

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well, we can't control the pace
yep, control what we can control and

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understanding. We can't boil the ocean. We can't get all of it done

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at once. So the pace is
going to come. Change is going to

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come. We don't necessarily know land. I mean up with the exception of

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things like the small business room,
chance having you're tired if you took the

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things free get hardy out there.
But those are following the formal, formal

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rulemaking process. For those other things, we know they're going to come when

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they come. Breathe read it,
and we heard something earlier today and it

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was actually the one of our forum
sessions. Look through the tone, looks

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through the rhetoric that the press release
has in it, and get to the

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underlying substantive issue and how that impacts
your institution, not just the tone that's

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coming from DC, whether it's the
CFPB, fd C, OCC, whomever's

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putting out the release. Really focus
in on what they're trying to get at.

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Evaluate your product and service based on
that, not on the they're just

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piling onto the industry part of it. We get that, look the underlying

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issue. It's funny you said breede. When I my original version of my

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notes, it doesn't say it here. Breathed was what I wrote out too.

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So that's and the other thing I
would say is had staff now stay

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staffed up. Um, you know
the paces that of a change for a

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while and you know so and be
mindful of your genes and you know,

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make sure that they're breathing and that
they're now thriving in this environment and invest

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in their well being. Um and
um. You know the other thing weak

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or to Babe that I would say, it's continuing to focus on complete data.

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We've treed that from almost every average
speaker and every four I wait by

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then, you know that is such
a key to unlocking risks, and you

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know, you know the bureaus,
we know agencies use it. So you

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know, continue to really mind that. And as more data becomes available,

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is more technologies, tools become available, leverage them to mind data because that

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is what you know. I think
we'll be the key to getting in from

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out, Um, patricious, I
get two things to fall up on both

337
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of your as We'll start with yours, which is Um, you talked about

338
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the underlying issues versus the tone.
I noticed this recently and I'm curious that

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00:22:44.559 --> 00:22:48.000
you have other examples of it.
But like in there were losses brought by

340
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that the New York State, the
appass and Attorney General against various auto automobile

341
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lenders, right, I remember reading
the tone of the press release was like

342
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angry expensive loans and then I like, what what are they getting sued for?

343
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Oh, they didn't disclose fees.
What's that's different than unafforded? There

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was like this kind of like message
of we're unhappy, and certainly I told

345
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my team, like I know we're
not doing the things that are wrong.

346
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But you should be looking at the
tone too, because they are worried about

347
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putting people on affordable loans. But
it was interesting to notice the difference and

348
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focus on what the press release might
have said, what the statements were that

349
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we were unhappy about, and then
you go, what were the actual findings

350
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of things that was done wrong?
Yo, it was really lack of disclosures,

351
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lack of clarity on that's a very
different thing than unaffordable loans or ability

352
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to repay. Even if that's some
of the rhetoric that's that's coming out of

353
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the top of that, it's interesting
to see that those are not always aligned.

354
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And how do you think about the
value of what they're saying, which

355
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tells you a little bit about where
they're coming from, and the value of

356
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what they're actually making an enforcement action
about or giving advice about, which is

357
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like it was a different thing sometimes
than what's being said at the top of

358
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them. Yeah, really absolutely,
the words the tone go down to about

359
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the third or fourth paragraph. Yeah, and you get two underlying issues.

360
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Yes, right, so you can
almost look at the release, Okay,

361
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this is a company, this is
how word salad word salad, word salad.

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Here's what the real issue meets potatoes, the rights really no one,

363
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Let's let's skip the appetizers, right
and let's focus. Let's focus on the

364
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main course. What is the what
is the crux of the issue, and

365
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how do we need to evaluate our
processes, not the rhetoric. It's the

366
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key issue, the key issues in
the processes. I think the other thing

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the Pamela Is said today was when
you get to that meeting Potano's issue,

368
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don't think of it a silo.
Whenever you know, in your example it

369
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was related to Ottoman, think about
that across your portfolio and what they're really

370
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saying there and look at your practice
is against Yeah, it could be precursor

371
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to what's some other access coming in
maybe same day. They didn't disclose fees

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correctly for a student loan or we
don't have student loans. That doesn't apply

373
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to us, No, we have
loans. Stead of thing I wanted to

374
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build on that you had mentioned,
Jem was this um technology because the idea

375
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that like I look at ten seventy
one, I look at ten thirty three,

376
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and there's a lot of this.
It's like, it's not just process

377
00:25:00.839 --> 00:25:03.519
change or rule change is like,
Hey, we're going to need a technology

378
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infrastructure that enables us to actually support
new use cases, new requirements moving forward.

379
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How do you think about the investments
that you can be making today from

380
00:25:14.319 --> 00:25:18.799
a data layering capabilities and technology abilities, say, this is what we're going

381
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to need, whether it's evaluating complaints
as you talked about today, or whether

382
00:25:22.960 --> 00:25:27.279
it's getting ready for consumer access to
financial records in the future, or collecting

383
00:25:27.480 --> 00:25:32.200
ten seventy one small business data,
Like, how do you think about making

384
00:25:32.240 --> 00:25:36.200
sure the institution is prioritizing investing in
the technology that enables you to do these

385
00:25:36.200 --> 00:25:40.160
things that you're going to need to
do, maybe not today, but before

386
00:25:40.200 --> 00:25:41.799
too long, and you don't want
to wait till the last minute. Start

387
00:25:41.880 --> 00:25:47.759
that investment right and get off in
front of that absolutely putinit Bree Moore and

388
00:25:48.039 --> 00:25:51.119
one of the other things, you
know, focusing ere ape, buyans and

389
00:25:51.279 --> 00:25:55.680
risk you know, as you're going
from those projects and partnering with folks not

390
00:25:55.720 --> 00:25:59.359
only on the technicals rules and what
doy do we have to submit, but

391
00:25:59.680 --> 00:26:03.160
help we leverage that data to help
identify other risks. So where can that

392
00:26:03.279 --> 00:26:08.319
data be lanveraged throughout the organization to
bring together monitoring opportunities and other things that

393
00:26:08.400 --> 00:26:11.720
bad nature and you know, thinking
about how powerful data can be and the

394
00:26:11.799 --> 00:26:17.039
more of what we have I can
bring into a riskless compliance or graps,

395
00:26:17.079 --> 00:26:22.359
the better off will be. And
staying you know, in the same lane

396
00:26:22.400 --> 00:26:26.480
and admit the same speed as other
folks. Is that a skill set you're

397
00:26:26.519 --> 00:26:29.880
hiring for more in the risk in
compliance areas like data analytics. I feel

398
00:26:29.880 --> 00:26:33.240
like it's there's this h there's so
much data now and it's so powerful,

399
00:26:33.240 --> 00:26:36.400
but you have to have people who
know how to interrogate it, understand it,

400
00:26:36.680 --> 00:26:38.960
ask the right questions of it.
It's usually not so simple as just

401
00:26:40.000 --> 00:26:41.960
like there's a data it tells us
something. It's like you gotta actually understand

402
00:26:41.960 --> 00:26:45.000
how to like kind of ask the
right questions of the data to find out

403
00:26:45.039 --> 00:26:48.599
the insight you're looking for. And
I'm curious, that's something you're putting in

404
00:26:48.680 --> 00:26:51.640
house the on the compliance teams,
so you have like a risk teams,

405
00:26:51.640 --> 00:26:53.480
you have the ability to look at
that directly, not relying on some data

406
00:26:53.519 --> 00:26:57.559
analysts from a product or wherever.
Yeah, we are, we are definitely

407
00:26:57.599 --> 00:27:00.920
looking for folks as some folks on
our team now who can sort of design

408
00:27:00.960 --> 00:27:06.039
those queries and think about the data
that's available and we or might that help

409
00:27:06.039 --> 00:27:10.440
plus find risk for you know,
even the good back to the basics was

410
00:27:10.440 --> 00:27:14.400
another one on the concepts today.
We're make sure you're doing the basics well,

411
00:27:14.480 --> 00:27:15.759
so how can we leverage our data? Make sure we're doing that.

412
00:27:17.119 --> 00:27:19.839
And we spend a lot of time
with our data anthemetics teams as well,

413
00:27:19.880 --> 00:27:25.680
and really have built great partnerships there
too. They helpless chelge, you know,

414
00:27:25.720 --> 00:27:26.480
we can sort of think of how
to get at the data and then

415
00:27:26.519 --> 00:27:32.640
they will help us build that and
it's been a really fruitful partnership that we've

416
00:27:32.720 --> 00:27:37.440
started to leverage in the compliance base. And we're not hiring directly for that

417
00:27:37.640 --> 00:27:41.720
in our compliance organization, but we're
hiring more for that in our organization as

418
00:27:41.720 --> 00:27:45.519
a whole. And partnering with that
group with our data analytics seems like this

419
00:27:45.599 --> 00:27:47.680
is what we're looking for, This
is what we're trying to get at.

420
00:27:48.079 --> 00:27:51.000
These are the risks we're trying to
vitigate. What do we have available?

421
00:27:51.039 --> 00:27:53.160
How can we design that? And
then we're focusing on taking those numbers and

422
00:27:53.200 --> 00:27:57.480
trying to draw some conclusions and using
our risk at risk experts for that.

423
00:27:57.519 --> 00:28:02.200
And you know that getting back to
base the mentor that use the phrase blocking

424
00:28:02.200 --> 00:28:06.160
and tackling, you know, you
can't do anything unless you block and back

425
00:28:06.200 --> 00:28:08.759
when you get those base elements of
your program, base elements of your data

426
00:28:08.799 --> 00:28:14.240
sets and understanding what you have,
and we'll really have a big focus on

427
00:28:14.279 --> 00:28:18.119
that organizationally and getting those analytics teams
up. Yeah. I love what you

428
00:28:18.119 --> 00:28:22.000
said too about like getting in front
of like here's what we're looking for and

429
00:28:22.079 --> 00:28:25.680
why, because one of the things
I've experienced is I've often sat like at

430
00:28:25.680 --> 00:28:27.720
the interface of like the technical or
data people in the business, but it's

431
00:28:27.720 --> 00:28:30.759
like that's gonna want my career there, And so often I get a red

432
00:28:30.799 --> 00:28:33.839
question from the business team to goes, I need X, and I go,

433
00:28:34.200 --> 00:28:38.319
well, help me understand why.
And then once I get to why,

434
00:28:38.359 --> 00:28:41.000
I go, actually, you don't
need X at all. That won't

435
00:28:41.000 --> 00:28:45.599
answer the question you've got. You
need why, and why is going to

436
00:28:45.680 --> 00:28:48.039
get to the thing that you really
need. But if you have an organization

437
00:28:48.119 --> 00:28:51.279
or approach where you like to say, I neither set of data. Can

438
00:28:51.319 --> 00:28:53.720
you give me a CSB with the
stuff or graph this form and you go

439
00:28:53.920 --> 00:28:57.000
sure, and they get post it
back and it's like that may not actually

440
00:28:57.079 --> 00:29:00.200
like the skill of saying hey can
I and you'd understand what I'm trying to

441
00:29:00.279 --> 00:29:03.240
understand what I'm trying to get at, so you can help me understand where

442
00:29:03.240 --> 00:29:07.680
to look in my data and find
that is so critical versus saying, hey,

443
00:29:07.680 --> 00:29:08.519
can you give me a chart of
this? I go sure, and

444
00:29:08.559 --> 00:29:11.240
then you get the chart that actually
didn't give you the insights you were looking

445
00:29:11.240 --> 00:29:14.799
for. But you didn't use the
people with the deep knowledge of the data

446
00:29:14.799 --> 00:29:18.279
to help you find the best answer
to the underlying question. You ask,

447
00:29:18.440 --> 00:29:21.400
what's the right data set? What's
the right source for the information? You

448
00:29:21.400 --> 00:29:25.200
could have somebody working for weeks on
a query out of your yeah, loan

449
00:29:25.279 --> 00:29:27.839
servicing system, when an Excel sort
of your humbler might give you exactly what

450
00:29:27.960 --> 00:29:30.839
you needed. Right, Yeah,
it's stop in five minutes. You understand

451
00:29:30.880 --> 00:29:34.039
of what you're trying to get at
is just as critical as that itself.

452
00:29:34.160 --> 00:29:38.519
Yeah. Absolutely, any last thoughts
before we before we break here on things

453
00:29:38.559 --> 00:29:42.039
for the committee or key things on
top of your mind for the next year.

454
00:29:42.960 --> 00:29:45.759
I just think, buckle up,
it's going to be a ride.

455
00:29:45.000 --> 00:29:48.039
I mean man, everybody, everybody
that's coming through this podcast is saying that

456
00:29:48.160 --> 00:29:52.039
right now, it's a crazy year, you think, and I think we've

457
00:29:52.200 --> 00:29:56.279
both been around for quite some time, and I can remember the biggest thing

458
00:29:56.279 --> 00:30:02.279
you've unprephanded and sometime was ladd Frank
rules and tread the servicing rules. Those

459
00:30:02.359 --> 00:30:10.759
were massive, massive undertakings that were
creating processes and practices that previously did not

460
00:30:10.880 --> 00:30:15.119
exist, especially in services space.
Yeah, there were no rules prior to

461
00:30:15.119 --> 00:30:18.640
that, no formal regulatory, guidance, regulations, anything else. And that's

462
00:30:18.640 --> 00:30:22.920
where we're heading in the ten seventy
one right There is no rule right now

463
00:30:22.240 --> 00:30:26.599
that is anything close to similar to
this. I looked at in the PAP

464
00:30:26.680 --> 00:30:30.920
that's folks on commercial ending. So
it's not just okay, we can take

465
00:30:30.960 --> 00:30:34.000
some dat amount and collected and report
it. You have to build the infrastructure

466
00:30:34.039 --> 00:30:37.160
first to get it, train people
to ask for it. And it's going

467
00:30:37.240 --> 00:30:45.200
to be at eighteen to thirty six
month thing rodeo of getting our hands around

468
00:30:45.440 --> 00:30:48.559
the data, getting our hands aut
processes, the people, training systems,

469
00:30:48.839 --> 00:30:51.720
the whole deal. And I think
this is going to be one of the

470
00:30:51.720 --> 00:30:56.440
most complicated things that we've had to
implement maybe in our careers, and coupled

471
00:30:56.440 --> 00:31:02.279
that with Mutters modernizing the commedia user
rule that this will likely play into,

472
00:31:02.279 --> 00:31:07.160
and we could have three separate data
reporting rules going on at once if they

473
00:31:07.160 --> 00:31:11.359
don't time this corrected between Honda,
CIRA, and small business bumbas. So

474
00:31:11.000 --> 00:31:15.680
it's going to be very complex just
in those areas. Buckle up, all

475
00:31:15.759 --> 00:31:21.039
right, I'll love with that.
Then, I can't think of anything better

476
00:31:21.119 --> 00:31:25.079
to say. Absolutely, buckle up. You have. You know what I

477
00:31:25.119 --> 00:31:29.079
will add, Stay in touch with
your colleagues are committee. I can now

478
00:31:30.200 --> 00:31:33.960
talking through a lot of these more
complex issues with your peers and even just

479
00:31:33.079 --> 00:31:38.079
yaring there freezing the same challenges I
think is helpful until really you know,

480
00:31:38.200 --> 00:31:44.319
filter us networks and stay in touch
with every model you know. It's piece

481
00:31:44.359 --> 00:31:48.240
of advice i'd have. There is
no competition and compliance. I like that

482
00:31:48.400 --> 00:31:51.200
as a game. We enjed.
That's a grade one liner to end one

483
00:31:51.319 --> 00:31:55.759
nice shot man, there's no competition
and compliance. Use your network. We're

484
00:31:55.759 --> 00:31:57.920
all trying to get the same good
things out there. Well, Jen Aaron,

485
00:31:57.920 --> 00:32:00.400
thank you guys both for joining me. I really appreciated this was great.

486
00:32:00.440 --> 00:32:05.640
That's great. Thank you Thanks for
having us. Upstart partners with banks

487
00:32:05.640 --> 00:32:09.000
and credit unions to help grow their
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488
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models. With fraud rates near zero, Upstarts all digital experience reduces manual processing

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That's upstart dot com slash foward dash
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500
00:33:14.119 --> 00:33:17.279
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501
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502
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503
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