Small mortgage bankers should not think their organizations are not of interest to the
If you have signed agreements with warehouse lenders or investors you are on CFPB’s radar, Roberta Janel, director for CohnReznick Advisory Services, said at the Regional Conference of Mortgage Bankers Associations in Atlantic City, N.J.
Another item which piques CFPB’s interest in a company is if the agency has received a consumer complaint.
Janel’s suggestions for organizations to prepare for a CFPB examination is to first appoint a contact person to deal with the regulators. There should be a list of senior executives, directors and owners available.
Information on the licensure of those who require it and a grid of all product offerings should also be available. The contact person should have on hand any agreements or contracts with employees who are in an incentive program.
Companies need to have written policies and procedures in place regarding regulatory compliance, and the information that they are being followed, Janel said.
She suggested having an enterprise risk management team in place. The team should assess any risks in the business plan and put together a plan to mitigate them.
Bonnie Nachamie, who is a compliance attorney, said mortgage companies need to structure a system which ensures consistency in compliance reporting. A problem with reporting is what could put a company out of business.
Policies need to be written and memorialized, she said, adding they need to fit the organization. One cannot copy Bank of America’s manual and expect it to work for a small or midsized lender.
Nachamie gave a simple acronym to help companies be ready for CFPB—ACT.
The A is for assess your institution, automate procedures where possible and insist on accountability for everyone in the company.
C stands for providing compliance checklists, develop job descriptions to ensure competency and establish a corporate culture.
T is for training the staff to prove the company is making a commitment to compliance.
