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Published: April 30, 2017, 9:54 p.m.

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This episode is incredibly special, in two ways.

First, Lyn Farrell is not only my former colleague, but one of my very best friends. We had such fun recording this at my apartment in Boston one weekend late last year. In many ways, it\\u2019s just a slice of a long conversation we\\u2019ve been having more or less continuously for years, including over countless meals on the road together, in the consulting life we used to share

Second, I love it when our podcast discussions are actual brainstorming sessions. This one hit the jackpot on that front. In our back and forth, Lyn came up with an insight that neither of us had when we started, and both of us have found it reshaping our thinking ever since. It comes late in the episode -- you\\u2019ll know it when you hear it. I hope you find it as powerful as we did. \\xa0

Lyn Farrell is former Managing Director, and now Advisory Board Member, at Treliant Risk Advisors. \\xa0She is arguably the foremost expert in the United States on regulatory compliance matters regarding consumer financial protection. As we note in our discussion, she literally \\u201cwrote the book\\u201d on compliance as the author, for more than twenty years, of the Reference Guide to Regulatory Compliance, published by the American Bankers Association as the foundation material that candidates must master in order to become Certified Regulatory Compliance Managers. Lyn is an attorney, in-demand public speaker, prolific writer, and consultant who has worked with every imaginable regulatory challenge, from the world\\u2019s largest banks to small community institutions and fintech startups, and from positive, proactive clients to cleaning up grizzly enforcement problems. She has, simply, seen everything.

Fortunately for us, she has opinions about it all and shares them with bracing candor in our talk. She describes what\\u2019s failing in our current regulatory regime and explains what everybody is getting right and getting wrong, from Congress and regulators to bank CEO\\u2019s to compliance and risk professionals to IT departments, to her fellow lawyers, to fintech innovators. She offers a cogent indictment, from the inside, of the weaknesses of what we\\u2019ve built -- the disclosures no one reads, the high costs of compliance, and the tragic mismatch between where we expend resources versus what consumers actually need.

She\\u2019s also expert in bank IT operations. It\\u2019s an open secret that most banks have antiquated IT, often accumulated through decades of mergers and acquisitions in which older systems were never integrated but rather, as Lyn puts it, stuck together with \\u201cbailing wire.\\u201d (We explored solving some of this through blockchain technology in my earlier Podcast with Blythe Masters of Digital Asset Holdings.) These old systems are a hotbed of compliance errors, for reasons she describes. It\\u2019s another area where startups have a counterintuitive advantage over banks, thanks to having no creaky legacy IT.

In our discussion, Lyn explores the regulatory present and past (it\\u2019s been a long time since I\\u2019ve heard anyone mention Regulation Q!), but she\\u2019s most thought-provoking about the future. \\xa0She works extensively with innovators and has a vision for how we should be using new data and technology to do better.

I always urge people interested in innovation to break out of their work silos and reach across disparate realms. \\xa0Lyn does this better than anyone I know. If it weren\\u2019t for her, I would never have attended a LEAN seminar, or done free-writing exercises to inspire creative thinking, or read Deep Work by Cal Newport, or watched the Amy Cuddy Ted Talk on \\u201cpresence.\\u201d

Since we made our recording, Lyn has stepped back from her full time role at Treliant to serve on its advisory board, spend more time in the beautiful house she and her husband Brian are building in Colorado Springs, and lead the Treliant Institute for Strategic Compliance Leadership, her brainchild. \\xa0Lyn asked me to speak at it, which inspired me to create a dinner talk I call \\u201cHeroic Compliance.\\u201d \\xa0It\\u2019s about the need for compliance officers -- even though they often seem more like Clark Kent than Superman -- to save their banks, customers, and industry by leading them into the high-tech innovation age. No one embodies that leadership more than Lyn, and I\\u2019m titling this episode with the same name -- Heroic Compliance.

The same day we recorded this episode, Lyn told me she\\u2019s launching her own podcast show, aimed at compliance professionals. She said my dinner speech prompted her to give it the name, \\u201cCompliance Heroes.\\u201d You\\u2019ll find it on ITunes and the Android Market.

Here are two more titles in Lyn\\u2019s recommended reading:

Emotional Intelligence 2.0 \\xa0by Travis Bradberry

Presence by Amy Cuddy \\xa0

\\xa0

And here is more on her background\\u2026.

Kathlyn L. Farrell, CRCM, CAMS, AMLP

Senior Advisory Board Member

Lyn Farrell is an experienced Regulatory Compliance executive, with over 35 years of experience in banking law and compliance. She is a Senior Advisory Board Member at Treliant Risk Advisors, LLC. Lyn has led many diverse and complex compliance projects for large financial institutions, including:

• Developing a regulatory compliance strategic plan for a financial institution that primarily operates in the Fintech space;

• Assisting the CCO of a top 10 U.S. bank to make the regulatory compliance program more proactive, strategic and integrated with the businesses and other risk management disciplines within the organization;

• Designing and building a comprehensive Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) audit program for the internal audit division of a top 10 U.S. financial institution, including developing the annual audit plan, scoping the individual audits, and writing the audit scripts;

• Assisting a top 20 bank implement all aspects of the TILA-RESPA Integrated Disclosure Rule (TRID), including revamping business processes, enhancing risk controls, writing policies and procedures and creating job aids to assist first line staff to implement this complex regulation;

• Developing the \\u201cUDAAP University\\u201d training program for the compliance departments at three of the top 20 financial institutions and for the internal audit departments at 3 of the top 20 US banks;

• Overhauled the Community Reinvestment Act (CRA) program for a top 20 US financial institution, including writing a new program document, reviewing its assessment areas and investments, and implementing a shift in the critical focus of its nationwide community development staff;

• Reviewing the potential acquisition by a top 20 U.S. bank of a large non-bank financial organization and provided advice on limiting the company\\u2019s regulatory risk by integrating and expanding the current compliance function and making it more strategic in its execution.

Lyn has a passion for leadership development and has designed the Treliant Institute for Strategic Compliance Leadership, a leadership program exclusively for compliance professionals in financial institutions She is a frequent speaker at banking events and regularly publishes articles on a variety of banking-related topics. Her recent publications include:

• \\u201cStrengthening the First Line of Defense\\u201d in ABA Bank Compliance magazine, September-October 2016\\u201cTRID: A Checklist for Successful Compliance\\u201d in Mortgage Banking magazine, March 2016

• Reference Guide to Regulatory Compliance, published by the American Bankers Association, the official study guide to the CRCM examination

• \\u201cIs this UDAAP or Not?\\u201d in \\xa0ABA Bank Compliance magazine, July-August 2015

• \\u201cFCRA: A Sleeping Regulation Awakes\\u201d in Banking Exchange, August 2015

• \\u201cEffectively Managing UDAAP Compliance in Mortgage Servicing\\u201d in Mortgage Banking magazine, April 2015

• \\u201cManaging UDAAP Compliance Risks in Financial Institutions\\u201d in Journal of Taxation and Regulation of Financial Institutions, Nov/Dec, 2013

She received her undergraduate degree from Texas A&M University and her JD from the University of Houston. \\xa0Lyn is a Certified Regulatory Compliance Manager (CRCM), and an attorney, licensed in the state of Texas. \\xa0

Lyn was the 2012 recipient of the ABA\\u2019s Distinguished Service Award.

More for our listeners:

I\'ll hope to see you all this week at FinXTech Summit in New York and of course CFSI\\u2019s Emerge in June.

Remember to review Barefoot Innovation on ITunes, and please sign up to get emails on new podcasts and my newsletter and blog posts at \\xa0jsbarefoot.com. \\xa0

Also go to jsbarefoot.com to send in your \\u201cbuck a show\\u201d to keep Barefoot Innovation going. Please also join my facebook fan page, and follow me on twitter.

Support our Podcast - Send "a buck a show"

I\\u2019m just back from London -- more on that later -- but one highlight is I recorded an episode with the one and only Brett King. Coming soon!

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