CFPB Provides Another Reason to Implement Best Practices
|September 12, 2013|
A report issued by the Consumer Financial Protection Bureau detailing mortgage servicing problems at banks and nonbanks provides another example of why it’s important to implement ALTA’s Title Insurance and Settlement Company Best Practices and develop formal, written policies and procedures.
In the report, the Bureau said it uncovered problems harmful to consumers. These include sloppy account transfers, poor payment processing and loss mitigation mistakes. CFPB examiners also found that many nonbanks are more likely to lack robust compliance management systems.
Among these deficiencies, the CFPB said nonbanks lack formal policies and procedures. The CFPB said formal, written documents that detail consumer compliance responsibilities and instruct employees on the appropriate methods for executing these responsibilities can prevent inconsistencies, sloppy recordkeeping and consumer harm.
Additionally, the CFPB reported nonbanks are forgoing independent consumer compliance audits. The Bureau said independent audits can help companies conduct quality-control checks on its operations. A compliance audit program can provide a company with information about whether policies and standards are being implemented. (ALTA has developed a Best Practices Assessment Preparation Workbook that members can use to examine adoption of ALTA’s Best Practices and measure if a company is prepared to undergo an assessment. Click here to learn more.)
“The CFPB expects the companies it supervises—regardless of size—to have fully developed compliance management systems to ensure all federal consumer financial protection laws are followed,” the Bureau said in a release. “A good system ensures that employees know about their responsibilities, creates structures for reviewing operations, and takes corrective actions when needed. A good system also lessens consumer risks and reduces the potential for violations.”