There is a requirement from the Consumer Financial Protection Bureau (CFPB) that mortgage companies have a Compliance Management System (CMS). We will focus on issues specifically relating to marketing and lead programs with a CMS. We want to provide useful information to assist you in the management of risk regarding marketing & lead acquisition for your mortgage company.
In January of 2013, the Federal Financial Institutions Examination Council (FFIEC) requested comment on its proposal, Social Media: Consumer Compliance Risk Management Guidance, in the Federal Register. The period for comments closed in March, and it appears that regulations concerning social media are coming.
Social media is an exploding and fast-changing communication medium and a very powerful marketing platform. Mortgage companies and mortgage loan originators (MLOs) are embracing social media more and more each day. You can use this medium while satisfying the needs for compliance.
The definition of social media is very broad and fluid. It includes e-mail, Web sites, blogging, Facebook, LinkedIn, Twitter and other such sites.
What can mortgage companies do now to reduce risk with social media? It is important that your social media policy and procedure plans be in writing. Here are a few ideas to consider in developing your plan:
1. Develop a library of approved content based upon social media outlets for your MLOs and other marketing programs.
2. Establish an approval process for content for posting and require pre-approval of content.
3. Require disclosure by MLOs for all social media sites they are using.
4. Require all Web sites to be pre-approved before launching.
5. Develop a library of Web site templates for use by MLOs.
6. Require employees to use approved e-mail addresses connected to company and not personal e-mail accounts.
7. Indicate that periodic reviews of sites will be performed and develop a review process based upon CFPB guidelines.
8. Establish responsibility for compliance to a senior staff person.
9. If you have a wholesale channel, review the social media risk plan that your brokers/bankers have in place or recommend that they adopt one.
The CFPB, as well as state regulators, will review your plan, but also determine if you are, in fact, using it. If you have a wholesale channel, you are also responsible for your brokers/bankers. Don’t just shelve the plan and dust it off when regulators come knocking on your door.
Social media is a great way to interact with borrowers and an exciting technology that you need to embrace. With a little planning and thought, you will be able to manage risk while enjoying the benefits of social media.
Please feel free to contact me with any questions or comments.
Michael J. Wallace Esq. is president of CLIX MG. Marketing Compliance Manager (MCM) is a Web-based compliance management system for marketing and lead programs, including social media. For a 15-minute live demonstration, please visit www.clixmg.com. He may be reached by phone at (727) 474-0961 or e-mail [email protected]