How to Create Social Media that 'Follows' Compliance Rules

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Social media is an attractive marketing channel for lenders because it gives businesses and their sales staff a way to interact with their customers in an informal manner. But the lines between professional and personal communications can easily get blurred, leading to inadvertent posts and messages that could run afoul of mortgage advertising rules that are increasingly coming into regulators' crosshairs.

"It is an advantage and a disadvantage of these platforms that they are so personal," said Steve Garrity, co-founder and chief operating officer at Hearsay Social, which provides archiving and other support services. People use these platforms in everyday life to communicate, because they are informal and authentic. "That's what makes these connections so valuable."

When crafting a social media policy, a lender should state whether the company will use social media, and if so, how and why it's going to use it.

"What result [does the company] want from their social media engagement? If they are not going to use social media, they need to state that and they need to make it clear to their employees that they don't want their employees using social media in order to promote their products," said Yvonne Kita, a former compliance officer at two mortgage lenders who's currently the compliance manager at GTM Risk Management, a consulting firm based in Philadelphia.

Specifically, "the company needs to write down what kind of texting they allow, the type of wording and they also need to write down what they do not allow," said Michael Riedijk, CEO of online archive services provider PageFreezer.

After creating the policy, companies then need to train their staff on it. And then they need to monitor for compliance.

One way companies look to stay compliant is by creating social media and web page templets for employees' online presence. These templates need to be updated frequently because there continue to be new vehicles for social media interactions, said Ben Olson, a former CFPB attorney who now works at the Washington, D.C., law firm BuckleySandler.

Danvers, Mass.-based lender Mortgage Network has a social media policy that was created by its marketing and legal departments. "This policy includes situations in which loan officers must make certain disclosures, such as their licensing numbers, and provides advice on how to deal with negative reviews and internet trolls," said Executive Vice President Brian Koss.

It does not provide templates for social media profiles, but branches and loan officers are encouraged to use images of landmarks and iconic places unique to their area offices. Mortgage Network does provide cover images and correctly sized company logos.

On employee Facebook pages, Mortgage Network requires loan officers to use their name as it is listed in the Nationwide Mortgage Licensing System database and must also use their licensed title as given to them by Mortgage Network. Employees can also state any professional accreditations like certified mortgage planning specialist, as well as if they are a military veteran or hold other designations.

In the About section of a loan officer's Facebook page, the individual's NMLS number must appear on the profile, as well as the legal name of the company, which for Mortgage Network can differ based on what state the employee works in. As a result, the employee must display the company logo that matches the licensed legal name of the company. Finally, the licensed office address, telephone number and website need to appear. Cellphone numbers are also permitted, but not required.

For example, the cover photo for the Facebook page of Alex Brockway, who recently joined the company and works in Portland, Maine, is a picture of a local harbor. His posts mostly consist of photos of his marketing fliers, although there is a video and news items are posted as well.

Mortgage Network also requires a disclosure tab that it calls "House Rules" on all of its loan officers' Facebook page. This tab includes information about Mortgage Network's guidelines, what will not be tolerated on the page, disclaimers to third-party sties, materials ownership and Mortgage Network's legal license disclosure. The disclosure tab is updated yearly or whenever the legal department has changes to the disclosures.

At Mortgage Network, loan officers must notify the company if they plan to use social media, and must read and sign the company's policy statement. "We constantly update the policy regularly to account for new social media trends and lending rules," Koss said.

The blend between the personal and the professional on social media adds a level of complication to what customer data is allowed to be moved when a loan officer changes companies. That mixture creates less of a bright line than the one that exists when it comes to who controls the information that resides in a customer-relationship management system.

What happens in the event of a separation is normally covered in the contractual agreement between the loan officer and the company. Prospective loans and loans in progress are owned by the company, but "the fact you may be talking to somebody about potential business is separate" from that, said Robert Lotstein, an attorney who specializes in mortgage compliance issues. "General communications with people, that's not something you really can control, or need to."

In most cases, the loan officer is actually eager to disassociate himself from his former employer. Mike Anderson is a Louisiana loan officer who recently joined Mortgage Financial Services as its southeast regional director. For the first time in his career, he has an employer who encouraged him to have a business social media presence.

However, Anderson has not discussed with his new employer what would happen if he were to leave. But because it is a Facebook business page, he believes it would be taken down by the company and he would want the company to take it down.

Mortgage Network leaves the physical modifications of a former loan officer's social media site up to the individual, Koss said, primarily because the loan officers control their own passwords to the pages.

But as part of its policy, managers are required to document on employee termination forms which social media platforms Mortgage Network needs to examine.

"In reality, they usually need a little reminding. Oftentimes we've had to message them to ask them to take pages down or change information. Most of them comply right away, but a few never answer us," Koss said.

Because social media mixes personal and professional sides, a company should also look for the reputation risk. Anything posted is out there forever, even if it is deleted, it can still be found, Kita said. And posters should take care to avoid making political and other controversial statements. It goes back to having policies, training and monitoring in place.

"Once you find out that an employee is doing something wrong, you need to take action. Use the example to reiterate the policy so everyone knows they can't violate standards without repercussions," Kita said.

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