Mortgage compliance services provider The Compliance Group Inc. (TCG), now offers services supporting mortgage lenders’ adaptation to the Consumer Financial Protection Bureau’s (CFPB’s) Compliance Management System (CMS) requirements. As outlined in the CFPB’s Supervisory Highlights: Fall 2012, released Oct. 31, 2012, the CMS mandate requires mortgage lenders to implement and maintain a systematic approach to compliance including policies, procedures, and training that demonstrate commitment to key elements of consumer protection and risk management. Specifically, the CFPB expects lenders’ CMS to establish compliance responsibilities, communicate those responsibilities to employees, ensure that those responsibilities meet legal requirements and are incorporated into business processes, require operational reviews, and take corrective actions, including updating tools, systems and materials as needed.
“The CFPB’s Compliance Management System requirement is one of the most compelling compliance issues for mortgage lenders in 2013, since it creates a road map for navigating the complex matrix of regulatory demands,” said The Compliance Group president and founder Annemaria Allen. “Even though it is daunting to undertake the CMS requirements at a time when the primary task of lending is so challenging, lenders face catastrophic risk if they fail to get their houses in order.”
According to The Compliance Group’s CMS expert Compliance Manager Barbara Bechtold, mortgage lending “covered entities” need to convey the following satisfactorily to the CFPB:
► Explicit understanding of compliance responsibilities;
► Adherence of policies and procedures to regulatory standards;
► Effective internal communication of compliance responsibilities;
► Unflinching self-tracking, -monitoring and –auditing;
► Corrective paths for deficiencies with board approval; and
► Enterprise advancement of a compliance culture.
“CFPB has made it clear through CMS that the compliance function of a mortgage business must be concerned with both consumer protection and investor satisfaction – managing risk based on quality mortgage production all the way to Wall Street,” said Bechtold. “Lenders have turned their attention to the CMS, for the moment, with an eye for the audit. Culture change will follow.”
“Everyone knows now that compliance is the future of mortgage lending,” said Allen. “The truth is that it always has been.”