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.

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