TopMortgage Compliance Update (1)
 

November 6, 2012  

 


CFPB: Compliance Management System


Subscribe-Blue
Newsletter-Blue
 Website-Blue
 Forums-Blue
Twitter-2
Facebook-1
Linkedin-1
Banging Head Let us help!
Isn't it time to bring in the professionals? 
Contact Us-1-Beveled-160

Our Website Forums

LCG-Square-CC-2 (Blue)  

BCG-CC (134x134)  

CFPB Forum-CC-1  

OCC News Forum-CC-(134x134)  

BSA News Forum-Logo  

Mortgage Compliance Forum-Main  

Dodd-Frank Forum-CC-1  

NMLS Users Forum-CC-1  

FHA Forum-CC-1  

Veterans Mortgage Forum-Main  

516-442-3456  

Home-Website-LCG(160x27)-1
Compliance-Website-LCG(160x27)-1
Presentations-Website-LCG(160x27)-1
About Us-Website-LCG(160x27)-1
Clientele-Website-LCG(160x27)-1
Articles-Website-LCG(160x27)-1
Newsletters-Website-LCG(160x27)-1
Library-Website-LCG(160x27)-1
Contact Us-Website-LCG(160x27)-1
Greetings! 

On October 31, 2012, the CFPB issued its first issue of Supervisory Highlights: Fall 2012, a newsletter to the public and the financial services industry about its examination program, including the concerns that it finds during the course of its completed work, and the remedies that it has obtained for consumers who have suffered financial or other harm.

It is written as an Executive Summary, and it will not refer to any specific institution. But it will "signal to all institutions the kinds of activities that should be carefully scrutinized for compliance with the law."

According to the CFPB, it has already taken non-public supervisory actions against financial institutions participating in the credit card, credit reporting, and mortgage markets, confirming "remedial relief" to 1.4 million consumers, and causing the affected financial institutions to correct illegal practices. Importantly, and in consequence to the CFPB's examinations and actions, financial institutions were required to adopt effective policies and procedures to ensure that violations do not recur and, especially, mandating that they implement a robust Compliance Management System (CMS).

The CFPB maintains that an effective CMS is a "critical component of a well-run financial institution."

After a brief discussion about the CMS concept, I should like to outline these three significant findings derived from the CFPB's examinations: 
  • Comprehensive CMS Deficiencies Found Through CFPB Supervisory Activities
  • Deficiencies Related to Failure to Oversee Affiliate and Third-party Service Providers
  • Deficient Fair Lending Compliance Programs 
Jonathan Foxx
President & Managing Director
Lenders Compliance Group
 Back
IN THIS ARTICLE
Compliance Management System
Comprehensive CMS Deficiencies
Failure to Oversee Affiliate and Third-party Service Providers
Deficient Fair Lending Compliance Programs

 READ FULL ARTICLE 
 
 
I consider the term Compliance Management System to be a proxy for the term mortgage risk management. Our firm was founded on the premise that such risk management was the best way to ensure a financial institution's safety and soundness with respect to mortgage banking. At the time, there was only the term "risk management", a catch-all term that was overly broad. So I coined the term "mortgage risk management" to bring mortgage compliance into greater focus, expertise, and application.

Over the years, the prudential regulators and state banking departments have included much guidance in preparedness for their mortgage banking examinations. And now the CFPB has further elaborated the crucial and central importance of managing risk and examination readiness.

As recently as July 2012, I published a magazine article about The Rules of Operational Risk, in order to bring into strong relief the practical matters and unique circumstances of mortgage risk management.

The CFPB's conception of a well-conceived CMS is certainly consistent with the foundational features of mortgage risk management.

Both the CFPB and mortgage risk management require effective internal controls and oversight, training, internal monitoring, consumer complaint response, independent testing and audit, third-party service provider oversight, recordkeeping, product development and business acquisition, and marketing practices.

Mortgage risk management and the CMS both expect the development, maintenance, and integration of mortgage compliance practices across a financial institution's framework and applied to its entire loan product and service lifecycle.

As the CFPB states:
"Without such a system, serious and systemic violations of Federal consumer financial law are likely to occur. Further, a financial institution with a deficient CMS may be unable to detect its own violations. As a result, it will be unaware of resulting harm to consumers, and will be unable to adequately address consumer complaints."
 
  Read Full Article 
Read Article-1
 BACK 
  Professional AssistanceLCG 
Contact Us-2
 BACK 
LibraryLibrary
Law Library Image
Consumer Financial Protection Bureau

Supervisory Highlights: Fall 2012
Executive Summary
10/31/12

 BACK 
Suite of ServicesSuite
LENDERS COMPLIANCE GROUP is the first full-service, mortgage risk management firm in the United States specializing exclusively in outsourced mortgage compliance and offering a full suite of services in residential mortgage banking for banks and non-banks.

Pioneers in outsourcing solutions for mortgage compliance. 
 
 

Professional guidance and support to financial institutions!  

Mortgage Compliance 
CFPB Examination Preparation 
Anti-Money Laundering Compliance  
Legal and Regulatory Compliance  
State Banking Examinations 
HUD/FHA Examinations 
Loan Originator Compensation  
Licensing Compliance  
HMDA/CRA and Fair Lending 
Information Technology & Security 
Training and Education  
Quality Control 
Prefunding Fannie LQI Audits 
Platform Development  
Retail and Wholesale Compliance 
Correspondent Compliance 
Servicer Quality Assurance 
Affiliates Compliance (RESPA) 
Business Development 
Advertising Compliance  
Loss Mitigation Strategies 
Forensic Mortgage Services 
Agency Applications  
Sarbanes-Oxley Compliance (Part 404)  
Audit and Due Diligence Reviews 
Regulatory and Sales Training  
Portfolio Risk Management 
Credit Risk Management  
Loan Analytics Audits  
Compliance Audits 
Policies and Procedures 
Due Diligence Reviews  
Portfolio Purchase Audits 
Ginnie Mae Applications 

This communication is sent to our valued clients and colleagues, who regularly receive our Mortgage Compliance Updates, Compliance Alerts, Commentaries, and related publications.

These publications are free to subscribers. Information contained herein is not intended to be and is not a source of legal advice.

� 2006-2012 Lenders Compliance Group, Inc. All Rights Reserved.