Social media compliance, new CFPB TRID webinar
Some thoughts on social media compliance and addressing one issue from the CFPB's new TRID webinar from yesterday
So I was going to write an article on social media compliance and whether lenders should ban the use of social media (in other words, something NOT related to TRID for once). But then the CFPB held a great webinar yesterday and there's something I want to share with you. (Another great TRID webinar from the CFPB yesterday, which everyone should listen to. I could try and give you a link - but it'll be easier for you just to google "CFPB Webinar April 12" and find it yourself.)
Let's look at an abbreviated version of social media compliance, and then jump back into TRID waters.
Should You Ban Loan Officers from Social Media?
I had a bunch more on this topic, but we should discuss the webinar from yesterday, too. So let's keep it short.
No, for most institutions, I do not think banning sales officers from social media is the best decision.
Put aside reputation and productivity risks, the real risk presented by social media use here is compliance. Compliance with the SAFE Act, with advertising laws, with ECOA, and probably a few more. We're worried that a sales officer is going to tweet out that "we have the lowest rates in Boston" and then a regulator is going to call that an advertisement and a UDAAP violation (because it turns out you can't prove that you actually have the best in town).
I don't think trying to ban them from social media will actually eliminate all risk. First, it's impossible to enforce - define "social media" ... LinkedIn, Facebook, Twitter, a thousand more that you haven't heard of, plus a new one every day. Can we stop any employee from using this? How could we ever keep track of this. Would you be willing to enforce this ban, even against a top producer? Put all that aside, even if employees are banned from social media, there is still a chance that consumers are posting things online that we should be aware of. Maybe a group of angry customers started a "DownWithABCLender.com" website where they post bad stories about you. You know those are valid "complaints" that we should be aware of - and you can bet that any examiner is going to find that when they do a cursory Google search before coming in.
Long story short, I don't think that this is an area where compliance should override business creation and stifle creativity. It's an increasingly competitive marketplace, and the sales team will need social media (along with every other possible tool) in its arsenal to survive. To stay in compliance, the trick (actually not really a "trick") will simply be to actually monitor social media compliance. That means someone actually has to keep an eye on this on somewhat of a regular basis.
Note: I'm talking here about sales officers specifically. I'm not necessarily making the case for every employee. For example, I can't imagine encouraging your Collections Department to harass people on Twitter who are behind on their mortgage would go over very well.
Disclose Borrower Over-Payment of Fee Pre-Closing
So I feel a little vindicated here, but see back to prior newsletters where I felt a little whipsawed on this issue. One of several interesting things from yesterday's CFPB webinar was that they finally answered a question that has gotten a lot of attention.
Question: How to disclose on Closing Disclosure where you collect $500 pre-closing for an appraisal but the appraisal only costs $450?
The 5 lessons from the CFPB on this are as follows:
Do not disclose this as a lender credit
There are at least 3 different ways that are permissible
Option (#1) - Simply refund the borrower the $50 before closing. CD just shows $450 for appraisal cost
Option (#2) - Take the $50 and allocate it as paid Before Closing on any other fee (but CFPB encouraged us to do one of our own fees) on the CD. Appraisal shows as $450 paid Before Closing.
Option (#3) - Show a -$50 charge for the appraisal as paid At Closing and a $500 charge on the same line for the appraisal but as paid Before Closing.
Here are the actual slides from yesterday along with my notes in red.
In Other News:
We'll have more on the most recent webinar from CFPB, but find it yourself by doing an Internet search for "April 12 CFPB webinar"
This week I'm down in SEC country setting up SCA's new South Carolina office (temporarily). Speaking of which, anyone out there proud to be Stanford grads after the football coach's comments last week on why they don't hold recruiting camps in the South? - "It doesn't make sense for us to go hold a camp some place where there might be one person in the entire state that's eligible to get into Stanford." ... Well excuussse me!
For an interesting resource on social media compliance issues, check out this article posted by the ABA
Getting license numbers from both RE Broker companies and individuals for the TRID disclosures has proven tough! Appreciate some friends passing along an on-line search engine for those realtors on Cape Cod.
Since we're taking the 4-hour flight to South Carolina with a 6-month old baby who I'm pretty sure is slated to be lead singer in a heavy metal rock band when she grows up, I've been brushing up on my conflict management skills. While I might use these skills to settle upset passengers, we all settle real conflicts every day with colleagues, employees, employers, and customers.
Here are some tips to better settle disputes:
Predict conflicts and handle with a plan - avoid getting caught by surprise and don't let known problems fester
Don't try to "win" an argument
It's business - don't take it personally
Focus on what's "fair" - don't unrelentingly argue for what's best for you
Take these thoughts on the topic from "For Your Improvement: A Guide for Development and Coaching", by Michael Lombardo & Robert Eichinger:
Caught in a win/lose predicament? Seek cooperative relations. The opposite of conflict is cooperation. Developing a cooperative relationship involves demonstrating real and perceived equity, the other side feeling understood and respected, and taking a problem oriented point of view. To do this more: increase the realities and perceptions of fairness--don't try to win every battle and take all the spoils; focus on the common- ground issues and interests of both sides--find wins on both sides, give in on little points; avoid starting with entrenched position ...
"Remember, a kite rises against, not with, the wind"
- Hamilton Mabie
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**These are our opinions. We're not authorized, or willing, to express those of others.**