MISMO standard for IRS tax transcript authorizations receives approval
The Mortgage Industry Standards Maintenance Organization on Tuesday formally voted to approve recommended language for tax-transcript authorizations in a move that suggests industry adoption has reached the point where it could start simplifying compliance reviews.
Broad adoption "ensures consistency, so that another party in the process has more confidence that the right disclosures were in place for the consumer," said Rick Hill, vice president of industry technology at the Mortgage Bankers Association and an executive vice president at MISMO.
MISMO drew up its recommended standards for language in consultation with a group of lenders and investors after the passage of the Taxpayers First Act last year created the need for the authorizations. Neither the legislation nor the Internal Revenue Service has specified what wording should be used.
Banking giant JPMorgan Chase confirmed that it is using MISMO's standard language for tax-transcript authorizations.
Chase "has implemented the MISMO taxpayer consent language for its retail originations and reviews the loan files it purchases to ensure the MISMO language is included," Suzanne Fay Garwood, assistant general counsel, said in a press release.
Lenders have long needed to get consumer consent to pull tax transcripts during the origination process, and the Taxpayers First Act added an additional authorization lenders need in order to share the data. In that authorization, lenders must disclose why the information is being shared.
MISMO is a nonprofit subsidiary of the MBA that has a separate board of directors and governance process. It draws up technical standards for data as well as for compliance language.