Best Practices Maturity Model Provides Another Tool to Measure Compliance

February 21, 2017

As the chief executive officer and majority owner of a title company with 25 employees, Nicole Plath understands the challenges of running a business. From generating new business, dealing with human resources issues, contending with TRID and keeping a watchful eye on fraudulent email wiring schemes, finding time for anything else is daunting. Despite everything on her plate, Plath became involved with ALTA’s Best Practices Executive Committee and the Task Force. She knew how overwhelming it was to document policies and procedures, and wanted to ensure title companies had the tools to prove compliance. 

“Similar to how we are all trying to contend with the various ways lenders want to exchange data for TRID, title companies also must meet diverging levels of vendor management protocols required by our lender clients,” said Plath, CEO of New Jersey-based Fortune Title Agency, Inc. “With some lenders not requiring any vendor oversight requirements to others mandating third-party certifications, it is essential title agents have useful tools to evaluate where they stand in regard to compliance.”

This was a driving force behind ALTA developing the Best Practices Maturity Model, an additional business tool that can be used to measure a company’s procedures against an established standard.

Maturity Model

Maturity Model Explainer

After nearly a year of discussions with members, lenders and assessment providers, ALTA’s Best Practices Executive and Internal Auditing committees created the Best Practices Maturity Model to help companies evaluate their policies and procedures to ease adoption of Best Practices. Maturity models have been used for decades in a number of industries, including technology and lending. Regulators, including the Consumer Financial Protection Bureau (CFPB), use them in their compliance assessments.

“Maturity models are used by lenders and regulators to analyze how companies operate and to measure a company’s policies against benchmark compliance levels,” said Michelle Korsmo, ALTA’s chief executive officer. “It provides companies with a valuable alternative to help them determine where they are on the path of Best Practices compliance and how they can improve. Compliance with Best Practices is an ongoing process for ensuring policies and procedures are followed and updated, and errors are detected quickly.” 

The term “maturity” refers to the strength of a company’s procedures and whether they are followed consistently. ALTA’s Maturity Model includes five benchmark levels ranging from ad hoc—meaning a company has not established any policies or procedures—to optimized—where a company is fully compliant with the Best Practices.

The results are shown in a summary similar to a report card and provide a more streamlined view of a company’s compliance with Best Practices, according to Diane Evans NTP, past ALTA president and a member of the Best Practices Executive Committee.

“This tool helps companies define what steps must be taken to reach compliance,” added Evans, who is vice president at Land Title Guarantee Co. “The Maturity Model gives agency owners and their employees a useful resource and a better understanding and appreciation for the assessment process.”

The Maturity Model does not alter ALTA’s Best Practices or change the required testing for an assessment, which should be performed using the Best Practices Assessment Procedures. If a company is already fully compliant with Best Practices, it should be in the optimized category of the Maturity Model. The Maturity Model does not invalidate any assessment a company may have already received.

“This tool in no way diminishes the value of Best Practices, its rigorous standards or existing assessments that have been completed and certified in the market place,” Evans said. “In fact, this report really heightens the needs for credible evidence of compliance.”

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