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Unlike CFPB Exams, State Audits Don’t Send a Calendar Invite
Imagine this: You’re sipping your morning coffee, checking emails, when a message from your state regulator drops in. Subject line? “Notice of Examination.”
No, it’s not spam. And yes, you’re on the clock.
Unlike CFPB audits (which usually come with some lead time), state audits can be sudden, specific, and vary wildly depending on jurisdiction. Think of them as pop quizzes for your entire operation—only with real consequences.
But don’t panic. At Strategic Compliance Partners (SCP), we’ve helped brokers pass audits with flying colors—even after an unexpected knock from regulators. Here’s what you need to know (and have ready) before that knock comes for you.
🧾 What States Typically Ask For
Every state has its quirks, but most regulators want the same core items when conducting an audit. Missing even one can trigger fines, corrective action—or worse.
1. Your Advertising Archive (Yes, Even the Facebook Posts)
Most states require access to all marketing and advertising materials—emails, flyers, paid ads, even TikToks—dating back 2–3 years.
💡 Pro Tip: Use folders labeled by quarter and platform. One broker we helped avoided a $2,500 fine simply because she had a clean, dated archive ready to share.
2. Transaction Logs and Loan File Access
States will almost always ask for a sample of loan files—especially closed ones. They’re looking for consistency in disclosures, timelines, and documentation.
📁 You’ll Need:
- Loan logs
- File notes
- Disclosures
- Signed agreements
- Any red flags identified (and how you addressed them)
3. Proof of CE Completion and Active Licensing
If your license renewal email is buried under 4,000 unread messages, it’s time to clean house. State auditors want to see up-to-date CE certificates and licensing records—not just for you, but for every LO working under your company.
🧠 Insider Tip:
Keep CE records in a shared folder with expiration dates clearly labeled. We recommend reviewing this quarterly (or let us do it for you).
4. Internal Compliance Policies (a.k.a. Your SOPs for Staying Legal)
Auditors often ask for written policies related to:
- Fair Lending
- Advertising
- Data Security & Cybersecurity
- Document Retention
📜 Even if you think, “But we just follow common sense,” you still need it in writing. That’s what shows regulators you’re serious about compliance—not just winging it.
🚨 Real Talk: What Happens If You’re Not Ready?
Let’s say you’re missing a few key pieces—maybe your ad archive is scattered, or a few policies haven’t been updated since 2020. Does that mean you’re doomed?
Not if you call SCP first.
We’ve helped brokers respond to audit requests in as little as 48 hours, compiling the right docs, reviewing files for red flags, and guiding them through regulator follow-ups. One client avoided a full-blown enforcement action just by working with us to clarify a misunderstood advertising disclosure.
✅ Quick Checklist: Are You Audit-Ready?
Use this as your fast-track prep list:
- Centralized archive of all advertising (2–3 years)
- Updated CE and license documentation for all LOs
- Transaction logs + organized loan files
- Written policies on lending, advertising, data security
- Secure document storage system
- A team (like SCP) who can step in when needed
📞 Don’t Wait for the Regulator to Call—Let’s Get You Ready Now
The best defense is a proactive plan. Let SCP walk you through everything you’ll need, double-check your records, and help you feel confident before the audit arrives.
👉 Visit our Compliance Services Overview
📩 Email sales@strategiccompliancepartners.com
📞 Call us at 301.578.6015
💬 Or schedule a chat with our team right from SCP’s homepage
What’s the one thing you know you should organize but haven’t yet?
Let us know—we’ll help you fix it before it ends up in an audit report.
📚 Sources:
- Nationwide Multistate Licensing System (NMLS)
- State Department of Banking Regulatory Notices
- CFPB Supervision and Examination Manual (2024–2025 Edition)
