The Federal Financial Institutions Examination Council (FFIEC) held a teleconference on Dec. 19 to discuss its Social Media: Consumer Compliance Risk Management Guidance, which was effective beginning Dec. 11. This article will summarize the teleconference.
The use of social media for marketing presents an exciting opportunity for the mortgage industry. It is cost-effective, immediate and targeted. It provides the loan officer and the company the ability for creativity and individuality. All types of businesses are now using social media, and its expansion is exponential.
The FFIEC indicated that “No new regulatory requirements are created or imposed” as a result of the Guidance. This does not mean that there are no additional compliance burdens and responsibilities placed on the financial institution. The FFIEC made it clear that all “existing compliance laws/regulations continue to apply to activities conducted via social media as they would to activities conducted via other channels.” What does this mean?
It simply means that social media must be managed in the same manner as current marketing channels. For example: A direct mail piece is reviewed for compliance before mailed and must be retained for two years. This appears benign; however, the implementation may not be. Social media is immediate, fast, nimble and voluminous. This will require the company to implement different review systems.
Should the company institute a review of content prior to posting, or a review after the fact? What about retention? The FFIEC Guidance does not provide the answer. The company is responsible to manage the risk and comply with all current laws/regulations.
We recommend the following:
1. Create a written social media policy, acknowledged by all;
2. Establish a “baseline” review of all social media usage at the start of employment for new hires;
3. Require users submit proposed content to review, and define appropriate workflow options to support rapid turnaround of requests; and
4. Establish a timely review process for continued compliance reviews of social media outlets, possibly twice a year.
There have been many changes in business marketing. Business information was mailed via the United States Postal Service (USPS); then faxed and now e-mailed or tweeted. Change is inevitable, the companies that adapt and embrace it will be more successful. Social media is here to stay and can be successfully and compliantly used.
Michael J. Wallace Esq. is president of CLIX MG. AcuClix is a Web-based software solution that provides a company with the ability to comply with FFIEC Guidelines to manage, review, report and inspect the usage of social media by its loan officers. For a free White Paper on social media and managing risk, visit www.acuclix.com. Michael may be reached by phone at (727) 474-0961 or e-mail [email protected]