The Mortgage Bankers Association (MBA) recently held their Regulatory Compliance Conference 2015 in Washington DC. It featured a number of panel sessions with individuals representing a diverse range of backgrounds, including attorneys, executive level servicing professionals, and CFPB employees, all providing guidance and perspective on the regulatory issues facing the industry. There was a large emphasis on Consumer Financial Protection Bureau (CFPB) examinations, as well as the TILA-RESPA Integrated Disclosure (TRID) rule, given the implementation began October 3, 2015.
There is certainly frustration within the mortgage servicing industry that the CFPB is governing through enforcement rather than rule making. The CFPB noted that the agency has attempted to provide transparency around the process with Supervisory Highlights Reports, Bulletins, and public consent orders. The CFPB’s perspective is that the rules are clear enough to know what side of the regulations a company is operating on.
There were many sessions that included a panel representative from the CFPB. During these sessions, representatives explained that the CFPB looks through the eyes of the consumer to direct their focus. Rather than checking boxes during an examination the CFPB seeks to understand the company’s practices beyond reviewing the policies. So, while a company may feel it has the best compliance management system (CMS) in place, consumers may feel otherwise and it will be difficult to escape increased questions and scrutiny from the CFPB. CFPB representatives noted that companies should understand a CFPB examination is a chance to educate the examiners on their process and is not meant to be a hostile experience. One CFPB program manager gave insight into how a company can best prepare for an examination noting a focus on a servicer’s mortgage origination modules and their CMS. Those on the other side of the exam table also gave common sense tips on going through an examination and suggested that companies:
- designate a single point of contact,
- organize the documentation provided to the examiners, and
- respond timely.
A number of roundtable discussions were held on topics ranging from servicing, diversity and inclusion, TRID, and litigation and enforcement. These sessions provided participants the opportunity to discuss in detail the issues facing their organizations and what they have been doing to manage them.
As one panelist noted, the amount of activity from the state and federal agencies over mortgage servicing rules guarantees the number of conference attendees will continue to grow.
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