regulatory compliance

Proactive Compliance Approach Costs Servicing Companies Less

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CFPB Consumer Financial Protection Bureau

CFPB Consumer Financial Protection Bureau

Regulatory compliance mandated by the Consumer Financial Protection Bureau (CFPB) has caused financial service providers to reevaluate their systems, identify areas that are lacking, and put measures into place to ensure fair treatment for their consumers. Positive changes have come from all the hard work and resources that have plagued businesses that have suffered a lot of negative public sentiment over the years. Proactive companies, those embracing change and conforming to compliance, are finding that it costs much less than getting hit with enormous fines, paying employee overtime to get up to speed with compliance, and of course the negative public sentiments toward their company.

Many highly-regulated industries however are “reactive” in their approach to regulatory compliance. They do not anticipate issues but rather wait for issues to arise and then “react” to them. This is short-sighted thinking and can be costly to a business. As mentioned above, the fines for non-compliance can be enormous and the scramble to catch up can be just as costly to a company. This is near-term thinking and not a focus on long-term goals which is disappointing to investors and discouraging to future company growth.

A proactive company is a forward-looking company and not only anticipates issues that might arise but has a clear direction and goals for future success. They have a compliance team that is open to change and forward thinking. By contrast a reactive organization fights an uphill battle, resistant to change, lacking or minimalizing proper training, and also likely to have very little management interest.

The CFPB is America’s watchdog and is focused on looking after Americans in the market for consumer financial products and services. It is a consolidation of various agencies previously responsible for federal consumer protection. Being directly funded by the Federal Reserve, it has even more power to impose fines and penalties for companies that react rather than prepare or comply to regulations. Regulations such as…

And more recent responsibilities such as…

  • helping consumers obtain the information necessary to make informed and responsible financial decisions
  • protecting consumers from harmful practices and discrimination
  • eliminating outdated and unnecessary regulations
  • consistently and evenhandedly enforcing federal consumer financial law to promote fair competition
  • increasing market transparency

Donnell Systems, Inc. takes a proactive approach to regulatory compliance providing an enterprise-caliber tool set called OCIE® ECM. OCIE is a rock-solid information archive and collective for industries such as mortgage servicing, banking and financial institutions and healthcare. It holds all interactions between borrowers, lenders and vendors and provides a clear audit trail for litigation and compliance when needed.

Are you proactive and is CFPB compliance part of your mandate? Will your company be ready when auditors inquire?

Small Lenders and Servicers Should Be Concerned About CFPB Too

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New rules like the “Ability to Repay” rule, promoted by the Consumer Finance Protection Bureau (CFPB), is written to deter what the government considers “risky features”. Risky features such as loans allowing for interest-only payments or negative amortization. In general the new standards do not allow for points or fees charged to a borrower to add up to more than 3% of the loan amount either. These are only a few examples too.

With all of these new rules and the expense of implementation and tracking, small lenders can be overwhelmed by the costs and extra work involved in maintaining compliance. It is because of the overwhelming need that we offer our solution.

Donnell Systems, Inc. provides OCIE®, their Enterprise Content Management Solution , for collecting, archiving and delivering all digital interactions between borrowers, lenders and vendors. OCIE has a unique set of enterprise-caliber tools for content management, process automation and delivery that make it suitable for protecting your organization and satisfying compliance demands.

Small lenders and servicers can now afford to protect themselves when they cannot afford to neglect regulators or their customers. Donnell makes it affordable with OCIE ECM Solutions.

Note: If you are a lender, we suggest that you audit your affairs for Reg Z and General CFPB compliance. This in the long run is a lot less expensive than defending allegations brought by the CFPB and paying both penalties and attorneys.

Building a Pro-Active Consumer Protection Strategy for Mortgage Servicing

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Mortgage servicing and real estate markets are recovering gradually and pressures are mounting for executives to place consumers and their interests’ front and center in mortgage transactions.

Previous regulations weren’t satisfactory. Traditionally, regulators based approval on mortgage originators’ credit decisions compared against the government housing agencies’ underwriting guidelines. This approval sought to ensure the safety and soundness of the banking system.

While this traditional approval is still in effect, consumer protection has been added to the mix. Consumer Finance Protection Bureau (CFPB) states that lenders must pay more attention to ensuring high levels of customer satisfaction without compromising consumer protection.

The CFPB has made it clear that they will hold lenders responsible for the actions of their employees, contractors and vendors, with substantial fines for violations. Avoiding such fines requires a deep understanding of the new rules and having a good system in place to track all correspondence, documentation and transactions between borrowers, lenders and vendors.

OCIE® is an Enterprise Content Management solution that not only archives those correspondences, documents and transactions but also helps automate workflow and make processes smooth, efficient and compliant. OCIE has a unique set of enterprise-caliber tools for content management, process automation and delivery that make it suitable for consumer protection. Or should we say business protection as well?

Not only should businesses be focused on consumer protection to satisfy new regulations, they should also focus on protecting themselves as well. Having the right system in place to track all interaction between the borrower, lender and vendor is essential in today’s mortgage servicing industry. With that in mind, is your organization ready?

MBA’s National Technology in Mortgage Banking Conference & Expo 2014 Highlights

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Lynn Donnell attended the MBA’s National Technology in Mortgage Banking Conference and Expo on March 18-21 in Los Angeles on the heels of an Orlando Mortgage Servicing conference. This conference was more about mortgage technology practices and trends, including automated processes, eDocuments and mobile customer solutions. Lynn was there to learn about current regulatory compliance and the technologies being offered to the mortgage servicing industry.

He concludes that OCIE® is the keeper of all interactions between lender, borrower and vendors to help protect the lender from loss mitigation and comply with regulatory compliance requirements. OCIE is a complete audit trail of all interactions whether they are in the form of documents, voice messages or other digital media archived. Lenders can quickly and easily respond to customer or auditor requests through their use of OCIE. This provides historical proof that the lender was within compliance which reduces costly fines and court costs.

MBA’s National Mortgage Servicing Conference & Expo 2014 Highlights

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Lynn Donnell attended the MBA’s National Mortgage Servicing Conference and Expo on February 18-21, 2014 and shares some insights about where the mortgage servicing industry is headed and the good things coming for those who are OCIE® customers. The Expo was held in Orlando, Florida this year and their theme was “Emerge. Evolve. Excel.

Servicing is in transition. You have been valiantly working your way through a vast maze of new regulations and procedures. As you look ahead, you need to find the sustainable, efficient and effective business practices that will help you grow and thrive in the servicing market of the future.” – MBA website & brochure

Lynn was able to attend round-table discussions, listen to presentations, and speak with mortgage servicing professionals from around the country. His focus was on new servicing rules established by the CFPB and the impact on the mortgage industry. According to speakers at the convention, those servicers that fail to improve efficiency and take advantage of emerging growth opportunities may get crushed. Smaller outfits are facing tough choices right now: stay in the business, exit or turn to service providers.

There were discussions regarding CFPB rules and responsibilities as well. Mortgage servicers are more responsible for their vendors within the new regulations established. Lynn notes that OCIE is in place and well equipped to help mortgage servicers keep a complete audit trail of all borrower, servicer and vendor interactions whether through documents, images, or even audio files. These touch-points get archived in OCIE and record an unchangeable audit trail and reference for regulatory compliance and audit preparedness.

OCIE customers have already been able to respond quickly to audit requests because their complete loan transaction history is stored in an OCIE archive. When you are under pressure to meet an audit deadline, you can rest assured that reports are quick and complete using OCIE. Avoid fines and penalties because you are well prepared.

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