ALTA Best Practices Can Help Lenders Meet OCC Risk-management Guidance
|November 7, 2013|
The Office of the Comptroller of the Currency (OCC) issued updated guidance to national banks and federal savings associations for assessing and managing risks associated with third-party relationships.
Banks are expected to practice effective risk management regardless of whether the bank performs the activity internally or through a third party, according to the guidance.
“A bank’s use of third parties does not diminish its responsibility to ensure that the activity is performed in a safe and sound manner and in compliance with applicable laws,” the OCC guidance said.
To help lending institutions supplement their risk-management programs, ALTA developed its "Title Insurance and Settlement Company Best Practices” framework. The Best Practices highlight policies and procedures the industry uses to help ensure a positive and compliant real estate settlement experience.
“Today’s risk-management guidance released by the OCC is another example of the value of the ALTA Best Practices framework for lenders trying to manage risk related to third-party relationships,” said Michelle Korsmo, ALTA’s chief operating officer. “As our lender clients work to develop their own risk management systems, the land title industry continues to lead by example. The Best Practices framework will continue to be a responsive product to meet market needs.”
ALTA’s Best Practices framework includes guidance on seven pillars, Assessment Procedures, Certification Package, Assessment Workbook and Policy and Procedure Creation Guidance.
The Assessment Procedures can be used by title professionals to help lenders decide if a third-party service provider meets different pillars of the Best Practices. A Certification Package also is available and can be used by title professionals to warrant and attest to lenders that they have implemented ALTA’s Best Practices.
The OCC reported that banks continue to increase the number and complexity of relationships with both foreign and domestic third parties, such as: