It is worrisome that many people in our industry appear unprepared for the new Consumer Financial Protection Bureau rulemaking. As we recently commemorated the birth of the 16th POTUS, it is useful to consider his thoughts on procrastination. Lincoln’s typically common sense observation “You cannot escape the responsibility of tomorrow by evading it today” contains worthy wisdom.
Based on my observations and discussions I’ve had with many folks throughout the industry, it seems as if some originators are moving a little slow on the planning and implementation necessary to update their technology to comply with the new Qualified Mortgage, HOEPA, appraisal requirements and servicing rules issued recently by the CFPB.
Most of these new rules take effect January 21, 2014–a mere 11 months away–which places demands on business, legal and technology units within each organization. Especially noteworthy is the fact that, in order to be ready for Jan. 21, 2014, the automation component of the new rules must be in a production-ready state several months before their enforcement or “go-live” date.
That gives, at best, a scant six to nine months to:
1) determine how these new rules impact us from a legal perspective;
2) create business plans outlining the new testing to be performed by our systems;
3) develop technological specifications from the business plans;
4) build the actual system logic and coding required to automate the functions;
5) troubleshoot and test; and
6) roll out the new changes company-wide (as well as provide training and education to the production teams so they are aware of the changes).
That’s a lot to ask of anyone in such a short time frame. That’s why it is of key importance to start now. I think that many people in the industry already find themselves quickly falling behind because at this point, technical specifications should be in process and technology teams should be gearing up to actually build the new tests.
Once again honest Abe can be counted on for the applicable wisdom: “Things may come to those who wait, but only the things left by those who hustle.” What are we all waiting for?