Lenders in today's market often face compliance challenges that bring the Consumer Financial Protection Bureau (CFPB) to their door with a huge fine. Mary Beth Doyle, founder of LoyaltyExpress examines these compliance issues and advises lenders on an effective way to avoid regulatory repercussions.
The Compliance Problem
One of the biggest compliance challenges lenders face today is enterprise-wide change management, as it relates to marketing methodologies being centrally defined and controlled. Unfortunately, individual loan officers have historically been allowed to march to their own beat in terms of advertising, marketing, and business-development initiatives. This fragmented approach is a major contributor to the gross violations and errors that the CFPB is cracking down on with costly fines and penalties.
Dynamic marketing and business-development initiatives can be steadily and safely achieved when appropriate compliance loops, content development expertise, disclaimers, and licensing fields are at the core of a lender’s marketing engine. Taking down the walls that hinder an organization from being compliant without fail requires strong leadership and a commitment to the betterment of loan-officer careers and the mortgage industry overall.
The Regulatory Side
Although a majority of CFPB rules mirror state compliance requirements, there are a multitude of differing regulations on a state-by-state basis. For example, specific locations of licensing fields and the placement and verbiage of disclaimers are governed not only at a state level – but can vary by county as well.
State-specific loan products and services are obvious examples of why regulatory guidelines vary state by state, such as the California Housing Finance Agency. These state-specific agencies are servicing the local needs and welfare of homeowners, including the ability to issue timely assistance for hardships. Just as economic conditions and disaster-related events differ on a state-by-state basis, so do regulatory guidelines in support of state-specific mortgage programs, products and services.
Lenders must proactively embrace compliant business-development initiatives – and the reality that strict guidelines and best practices are here to stay. Even if an organization is plagued with regulatory misdemeanors, taking ownership of their shortcomings (and recognizing that the CFPB will respond more favorably to remediation efforts) is of utmost importance. The CFPB is slowly getting around in its auditing efforts. Lenders must be prepared to demonstrate complete transparency in this ever-demanding and ever-changing landscape of compliance adherence. There’s no way around it.
Investing in world-class CRM and marketing automation services allows organizations to be both innovative and compliant with their business-development efforts. Primarily, the goal should be to establish unique, branded, and compliant one-to-one communications that drill down to specific needs and opportunities for targeted populations of prospects and customers. As a result of these intelligent, automated messages, loan officers will steadily enhance their qualified sales pipelines – as well as their overall capture rates of new and repeat business.
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