On November 28, 2016, the Consumer Financial Protection Bureau (CFPB) published Bulletin 2016-03 (Bulletin), click here, warning financial services companies, including entities supervised by the CFPB, of the detrimental effect incentives for employees and service providers to meet sales and other business goals can have on consumers if these incentives are not properly managed and supervised. The Bulletin describes compliance management steps supervised entities should take to mitigate risks posed by incentives. The CFPB expects supervised entities that utilize incentives to institute effective controls for the risks these incentives may pose to consumers, including oversight of employees and service providers involved in these incentive programs. These controls include a compliance management system (CMS) that reflects the risk, nature, and significance of the incentive programs to which they apply, with the strictest controls where incentives (i) apply to products or services less likely to benefit consumers or that have a higher potential to lead to consumer harm, (ii) reward outcomes that do not align with consumer interests, or (iii) involve a significant proportion of employee or service provider compensation. The Bulletin sets out the following components and steps of an effective CMS.