Why Mortgage Companies Need Built-In Compliance Tools
Business data is available at your fingertips, but is it protected? If your mortgage company isn’t talking about advanced data governance, you’ve...
3 min read
Hugo Gonzalez : Thu, Apr 06, 2017
When faced with a regulatory examination, many mortgage businesses simply freeze up and ignore what’s coming, often because they’re not sure what to do. But a regulatory compliance audit is not the time to bury your head in the sand. Rather, it’s an opportunity to demonstrate your mortgage business’s commitment to its customers and to regulatory compliance as a whole.
Let's start with a few basics about CFPB regulatory examination preparation for mortgage businesses and what you need to do get ready.
The Consumer Financial Protection Bureau (CFPB) identifies non-depository institutions for examination based on asset size, consumer financial transaction volume, and rigorousness of state oversight and state regulators.
The CFPB identifies large institutions for examination based on its assessment of consumer risk and consistency with statutory guidelines on coordination of examinations.
The CFPB searches for evidence of unfair, deceptive, or abusive acts or practices, discrimination, and other legal violations.
There are times when the CFPB becomes aware of violations through citizens’ complaints of certain problems at a single organization. In this instance, the CFPB will conduct a review of that single organization, focusing on the problems that gave rise to the consumer complaints.
Horizontal reviews examine multiple organizations within the industry to investigate certain practices or even products that violate consumer protections and to decide whether formal enforcement is appropriate.
The CFPB may enforce legal actions or civil actions in a Federal district court. The CFPB may seek equitable relief, such as:
The CFPB cannot bring criminal enforcement charges. If the CFPB finds evidence of criminal activity, or evidence of discrimination, the law requires that the agency turn over the evidence to the Department of Justice. If the agency finds evidence of tax law violations, the law requires it turn over such information to the IRS. Examples of criminal activity include false data, conducting business with a foreign country with active US sanctions, bank deposits in such sanctioned countries, and false information on applications.
As intimidating as the examination process may sound, there are things you can do to make the process go smoothly.
While the process may cause stress, remember that the auditors are not on an expedition against your organization. Throughout the examination, stay hospitable. Examiners often travel to your business from out of town. Let them know where they can find places to eat or to take a nice walk after lunch.
Access Business Technologies is a certified SSAE 16 Type II cloud solution provider (CSP) to over 500 mortgage financial institutions (banks, credit unions, and mortgage companies). Our suite of mortgage-specific cloud solutions enables your organization to move through the audit process with ease. To talk more about CFPB regulations or other mortgage compliance issues, please contact us. We look forward to helping you grow your mortgage business.
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