Monday, August 19, 2019

Why do I need an 800 Number? New York State Whistleblowers

This update addresses some of the issues we discovered in the past 30 days.

Privacy policies and marketing - The reason you MUST have a toll free company number

An 800 number provides customers with a direct, toll-free line to communicate with company representatives. The Gramm-Leach-Bliley (GLB) Act states that customers must have an opportunity to do what is called "opting out" of information sharing. Customers have the absolute right to call and direct that their personal information not be shared with non-affiliated third parties. Having an 800 number fulfills the requirements of the GLB Act.

Further, we recommend using the Privacy Policy from your LOS to populate your website or marketing policy, so you provide the same information across all platforms.

Download Link

Whistleblower Policy - Reporting responsibilities and protection of those reporting

Employees should maintain high standards of business and personal ethics in their conduct within the workplace. New York State, among others, requires lenders and brokers to have a Whistleblower Policy in place. Acting ethically in a workplace includes reporting any concerning or suspicious activity as soon as possible and in a professional manner. The Whistleblower Policy encourages directors, volunteers and employees to report suspicious activity, as well as protects those who report activity from any retaliation or adverse employment consequences.

View Sample Policy Here

Vet exhibits and organize your loan files efficiently!!

Prior to forwarding files to an underwriter or investor, ensure you properly organize and vet the contents. Using a checklist will help you do this efficiently. However, until you send them, do they sit on your computer as a mish-mash jumble of files? While many LOS systems will index exhibits for you, having access to the specific document before and after you upload it can help with further processing and post-closing document review.

This policy provides guidance on proper loan file taxonomy of exhibits which will help with post-closing delivery, audits, submitting exhibits to insuring and guarantee, and state regulatory reviews.

In addition, proper file naming conventions can help organize many individual exhibits into one single file.

View Sample Electronic Document Stacking Policy

Some CE Training May Meet Non-NMLS Compliance Training Requirements

Your Loan Officer's continuing education (CE) program may cover some of the compliance training requirements. We offer a compendium of compliance training recommendations on our affiliate site - With several of our affiliates, you can request add-on certificates to meet required non-NMLS compliance training, such as Anti-Money Laundering, Fraud, and TILA-RESPA. This can save your loan originators time and money.

Unfortunately, the CE training can't cover every element of your compliance training and for those we provide those to you here:

Did you know that we can also verify whether your licensing or other training does meet some of the regulatory requirements? All we need is a copy of the syllabus and training course materials, such as text, quiz or powerpoint.

Wednesday, July 10, 2019

Advertising, VA QC Requirements, NY Compliance Plan Update

We continue to update our products as we get feedback from our customers. We list the recent updates here, some of which relate to our review of materials from our Compliance VP CMS product. You will notice three themes for this series of updates:

Advertising on the Radar

Prompted by a Washington state review this past spring, advertising for particular products have come on to the Federal government's radar. The CFPB has stated its renewed interest in protecting veterans, and so has Veterans Affairs. Specifically, the question surrounds whether the way companies advertise certain programs comprises puffery or a deceptive act.

We provide free training to our compliance VP customers

Reporting Notices of Advertising Related Findings to HUD-FHA
A company must report any notice, sanction or citation received, from any state or federal regulator, agency or investor, relating to its advertising practices as a "Notice of Material Event" through their Quality Control plan.

We recommend that you review all advertising (even business cards, emails and social media postings) using an advertising approval checklist. Look most carefully at unsubstantiated claims, like best rate, fastest service, or lowest cost and avoid them unless you can substantiate them.

Advertising Trigger Terms
An updated checklist reviews what text or information you have to include if your advertising includes "trigger" terms.

VA Adamant about following Updated Pamphlet

Inclusion of VA Specific Requirements in Plan
The VA now uses a checklist to validate that you have included its specific quality control plan requirements in your plan. The updated pamphlet published 2/1/2019, has a listing of QC requirements, which the VA simply has memorialized in writing. We have most of this material in the QC plan, so this update references where a reviewer can find it. The only addition focuses on the use of Staff Appraiser Reviews, which doesn't really impact Post Closing QC, but which we add to the post-closing review process anyway.

New York State DFS - Again

New York State Compliance Plan
We have prepared a New York State-specific compliance plan to align with licensing application and renewal review feedback. To meet their requirements, we stripped out a lot of material they felt was extraneous. You should not exclude other elements of your compliance plan and rely solely on the DFS' explicit requirements, because we have found myriad other implicit and explicit requirements within the rules which could also result in findings.

Other Updates also available

Fraud Prevention – Red Flag Process
We inadvertently truncated the Fraud Reporting process, as it applied to possible organized crime. Or maybe an unseen hand silenced the author?

Unfair Deceptive Abusive Acts and Practices (UDAAP)
Certain investors wanted us to include CFPB definitions of unfair, deceptive and abusive acts. Reading the definitions you realize their redundancy; all UDAAP actions really tie back to the same actions. One unfortunate side-effect of so much regulation: policies and procedures that no one can follow because lawyers write them for legal action.

Can't access the links?

Members receive free access to updates. Request access through the link if it prompts you, and we will respond with authorization once verified.

In addition, we now offer the Compliance VP compliance management system for small companies.