There Are Two Stories: Do You Know Both?
When you become the target of a regulatory agency, it can become very easy to start grasping for rationalizations. As the CFPB begins to build its case against you, you are tempted to fall back on your own story. You know the facts. You know what really happened. So, you can rest assured that everything will be okay. The CFPB won’t find anything, because there’s nothing to find. But, before you start brushing off the investigation, it’s important to remember: the CFPB has a story too…
The thing about statistics is that they can be used to tell whatever story you want them to tell. Two people looking at the same exact set of facts may come to completely different conclusions based on their own biases. For example, think about how you decide where to put your branch locations. If you put the vast majority of them in affluent areas, your story is that you put them there because they are safer environments for your customers. However, the CFPB may look at the same data and tell a different story: that you are discriminating against geographic areas with high concentrations of minorities.
You know your story. You know why you engage in certain practices, and it is very likely that you have the purest intentions. However, it isn’t enough for you to know your own story. If you want to avoid problems with compliance, you’ve got to know the other story as well. You’ve got to think about how others may see the same facts differently. The first step in avoiding situations that could draw the attention of regulators is making a concerted effort to think like a regulator. There are always two stories: do you know both?