Do You Have a Target On Your Back?
What everyone really wants to know is whether they are going to receive a visit from the Consumer Financial Protection Bureau. Beyond size, a financial institution's likelihood of receiving such a visit can be predicted by the type and nature of their business. Mortgage lenders who engage in multistate lending, who derive business through telemarketers and substantial mass media advertising and/or third party leads (as opposed to word-of-mouth referrals), and who have multiple decentralized branch operations are considered to be at greater risk for violations of lending laws. In addition, mortgage lenders with widespread and large scale business or marketing arrangements with Realtors are also subject to greater scrutiny by their regulatory agency.
Of course the most important factor determining the likelihood of an audit involves complaints both to agencies and other public bodies. Also critical are business relationships with other entities having compliance deficiencies, where the nature of that relationship itself lends to the possibility of violations.
Regardless of whether you are a "risky lender" more likely to expect a visit from the Consumer Financial Protection Bureau, every lender—regardless of your overseeing body—should anticipate increasingly vigilant and exacting audits as the compliance bar is quickly rising for all lenders.