ComplianceEase launches technology solutions together with state mortgage/banking regulators to automate regulatory examsMortgagePress.comComplianceEase, AARMR, compliance, state regulators, RegulatorConnect, RegulatorDirect, ComplianceAnalyzer, CSBS
ComplianceEase, a provider of automated compliance solutions,
announced at the American Association of Residential Mortgage
Regulators (AARMR) Annual Regulatory Conference, the initial
release of its innovative RegulatorConnect and RegulatorDirect
solutions, which will enable state-regulated mortgage lenders and
banking institutions to plug into a new, more automated regulatory
examination process, reducing their required time and cost.
RegulatorConnect links institutions with state regulators through
electronic data transfer, while RegulatorDirect enables lenders to
electronically deliver compliance audit reports to regulators with
a single click. At the heart of the new process is
ComplianceAnalyzer, which was selected by the Conference of State
Bank Supervisors (CSBS) to provide baseline as well as customized
state agency-specific audits as the examination automation
component of the Model Examination Guidelines initiative.
In the middle of 2007, in the wake of the mortgage meltdown,
CSBS helped establish the Model Examination Guidelines (MEGs) for
state regulators to use as a set of recommended standards for their
members' examination processes. The MEGs comprised five different
modules, the fifth of which was intended to provide an "efficient
tool to mechanize certain mundane and repetitive examination
functions." As such, ComplianceEase's flagship automated compliance
system ComplianceAnalyzer was chosen as the examination automation
tool for the fifth module, following an eight-month evaluation and
selection process by a taskforce representing fourteen state
agencies.
"We've been very pleased to work with ComplianceEase on this
initiative. This has far reaching implications for the way
regulators and financial institutions will be able to approach what
has been, in the past, a time-consuming and cost-prohibitive
process," said Chuck Cross, vice president of mortgage regulatory
policy at CSBS. "Technology and automated solutions have become
essential elements for CSBS to leverage as we seek new ways to
standardize and improve regulatory supervision while streamlining
the examination process for institutions and for regulators.
ComplianceEase has helped us to achieve a very specific goal of our
'Improving Mortgage Industry Supervision Through Collaboration and
Technology' initiative," Cross added.
Traditional examinations involve a "sampling" approach when
reviewing loan portfolios. While well understood and accepted as
the present standard for examinations, a sample is still a sample,
and it relies on a small subset of loans to serve as a statistical
representation of the whole. Automated compliance has fostered a
new approach, enabling review of 100 percent of loan production and
loan portfolios to improve accuracy, coverage and enforcement. At
the same time a more automated process saves time and costs for
regulators and lenders alike. Advanced technology will bring
regulatory bodies and institutions closer so that both can serve
more efficient and more effective roles in the regulatory
process.
These initiatives represent the wave of the future for
regulatory supervision. Instead of the old method of combing
through a handful of paper files hoping to identify issues,
ComplianceAnalyzer can scan through hundreds of loans in a matter
of minutes, providing analytics that identify violations, patterns
and trends for examiners to focus on. In order to further improve
supervision efficiency, ComplianceAnalyzer will be enhanced with
additional state-specific rules and new tests based on requirements
from the regulators.
"We are very excited to be working with CSBS and state
regulators on the examination automation initiative. The goal is to
achieve efficiency, effectiveness, uniformity and standardization,
while reducing the cost and burden to regulators and the industry,"
said Michael Chan, vice president of ComplianceEase. "Financial
institutions know that they need to be prepared for major
regulatory changes and tougher regulations in the near future. It's
critically important for institutions to determine the best
regulatory strategies, particularly given the present economic
landscape," noted Chan.
A stricter regulatory environment is forthcoming as part of the
continuing response to the mortgage crisis. Financial institutions
of all sizes will continue to face the challenge of ever changing
laws and regulations. In order to fully understand the operational
risks, loan level reviews are necessary in order to safeguard
institutions' assets as well as to protect the consumer.
For more information, visit www.csbs.org or www.ComplianceEase.com.
