Regulatory examinations can disrupt business operations even in the best of times, but the Covid-19 pandemic has presented a number of new challenges.
In addition to managing remote legal and compliance teams, and the new technology systems to support them, licensed financial services companies find themselves navigating an inconsistent patchwork of state agency responses to the pandemic. Against this backdrop of uncertainty, companies are also preparing for the launch of the State Examination System (SES) and how it will change the examination process and complaint management.
APPROVED hosted a webcast featuring a discussion on how industry participants are managing examinations in a remote environment, as well as updates from the Conference of State Bank Supervisors (CSBS) regarding the latest developments within the SES and on managing complaints. Audience members submitted a number of questions that our panelists did not have time to address during the program, many of which are answered below.
Note: The questions below are reprinted as received and may have been edited for clarity
QUESTION: Does the point of contact need a separate login or access to the system?
ANSWER: All company users who will have a hand in fulfilling a complaint or participating in any supervisory activity will need a SES login. A user’s login credentials for NMLS do not work for SES. Before long, NMLS and SES will share a common login system, but for now, they are separate.
QUESTION: We are rounding out completing our first examination on SES and we are noticing some issues with notifications from the system. Can you talk about the functionality of notifications, when a notification will go to the company leads’ email, etc.?
ANSWER: Generally, notifications are sent to the company lead (the individual leading the exam on behalf of the company) or the company’s complaints POC whenever a key action is required or a task is due. Notifications are also sent to participants on exams and investigations, when appropriate. As we developed SES, we tried to balance the need for timely notifications with the risk of too frequent notifications that get ignored. We would appreciate your feedback and encourage you to send it to SESfeedback@csbs.org.
QUESTION: Have you had any issues with examiners not accepting electronic signatures during remote exams?
ANSWER: No. SES does not have an electronic signature function. Thus far, examiners have accepted the responses and documents from companies without the need for electronic signatures.
QUESTION: Kyle [Thomas, Vice President, CSBS] mentioned that the individuals identified in the agency’s system as the contact for exams will be the person who receives the invite for the SES. If the company has an email box set up to receive emails from the agencies, rather than a particular individual, will the invite go to the mailbox, and if so, how will the account admin be determined?
ANSWER: Agency users are discouraged from using group or generic email addresses when enrolling the first company user into SES. For the very reason mentioned, we were unable to use the contact email addresses in NMLS for this purpose. Thus, as each agency invites a company user into the system, the agency user will use the email address of the exam or complaints contact on file — either those in NMLS or in a separate state system.
QUESTION: Is there any way we can get guidance on onboarding? We were able to set up the admin box, but cannot figure how to get others access to work on the complaint retrieval?
ANSWER: Resources for company users can be found through the “Need Help?” links on most pages of SES or through the NMLS Customer Portal. The Company Quick Start Guide contains most of the information needed to get started and create new company accounts.
QUESTION: Is there a greater long term plan to move all exams to being off sites or is this plan only due to Covid-19? What will this look like in 2021?
ANSWER: CSBS believes we may be entering a new normal with holding remote examinations. Companies and state agencies are proving the ability to conduct a successful and thorough exam remotely. This will also help reduce costs for companies. CSBS would like to see all state agencies using SES fully, but ultimately it is up to each agency to decide when to join this new system. By year end 2020, 32 state agencies are expecting to be on SES.
QUESTION: When conducting SES with state exams, will we always have to use Google Authenticator?
ANSWER: No. Symantec is another alternative for company users. This choice is made by the user during the account setup process. The Symantec app can be downloaded to a mobile device at no cost if this option is selected.
QUESTION: Regarding complaint processing, do you anticipate all 50 states getting on board?
ANSWER: CSBS would like to see nationwide use of all its systems, including the complaints functionality in SES. With complaints, each agency will need to determine whether the functionality provided in our system fully meets their needs. Early indications are that a majority of agencies are eager to begin using SES and the complaints functionality in it.
QUESTION: Is it possible to set up multiple complaint contacts in the company contact information?
ANSWER: Your company can add as many users to the SES as needed and can further distinguish between complaints users and exam/investigation users. While a company can only appoint a single Complaints POC for each complaint in the system, an alternative email address, such as a group email address, can be entered on your company profile to receive notifications of new complaints or supervisory activities.
QUESTION: Can you provide a sample of the notification a licensee will receive when a new complaint is added by a regulator?
ANSWER: More information on system notifications can be found here.
QUESTION: Regarding complaints, when the system goes full throttle, will the regulator still speak to the customers regarding the response from the company?
ANSWER: Yes, at least initially. The next phase of development for complaints includes the creation of a customer portal whereby communications can occur directly with the customer who filed the complaint.
QUESTION: Are we able to set up within the system prior to receiving a notification from a state?
ANSWER: No. Due to security requirements, a regulator must invite the first company user. This will typically occur just before the first supervisory activity or complaint. Once that user is added, however, he/she may add additional company users as needed.
QUESTION: Regarding complaints, will the required response time be consistent? 15-30 days?
ANSWER: This will depend on each state’s requirements. Agency information requests for both complaints and supervisory activities are sent with a due date set by the agency.
QUESTION: Will responses be addressed to the consumer or agency? There is a lot of inconsistency between states.
ANSWER: Currently the complaints functionality in SES supports only the exchange of information between a company and an agency(s). The next phase of development for complaints includes the creation of a customer portal whereby communications can occur directly with the customer who filed the complaint.
QUESTION: Regarding complaints, is the roll out plan for all states to be required to use it or is it up to each state? We only received cases from Ohio but no other states.
ANSWER: CSBS is working hard to get SES and complaints adopted by all state agencies. There is no mandate for any state to use these systems, but support from companies will help in making these tools ubiquitous nationwide.
QUESTION: Can you provide the training guide for complaints?
ANSWER: All SES learning material can be found here.
QUESTION: Which roles get notification of the complaints? All Roles?
ANSWER: The company’s complaint point of contact in SES will receive the initial notification of a new complaint.
QUESTION: What email address will system alerts come from? We want to make sure information does not go to SPAM.
ANSWER: SES notifications will come from SES Notifications (email@example.com). During the onboarding process, one email will come from NMLS SSO (firstname.lastname@example.org) to guide the user through the multi-factor authentication setup process. More information on these notifications can be found here.