Escrow practices across the country vary dramatically already, but state and federal regulatory changes, market developments and fraud considerations promise to further complicate matters.
“One of the biggest issues right now is getting to be wire fraud,” said Philip Dryden, president elect, American Escrow Association. “People are spoofing email addresses and taking wires, intercepting the wires. Even our state regulator is now weighing in on it and warning our licensees here in Washington state that we need to create a program where we are warning customers through the program where they can call and confirm that we’ve received wires, and call and confirm our wire instructions when they receive them.”
He said Washington state is starting to monitor safe and soundness and security issues with it to become escrow agents, making sure the escrow agents have privacy policies in place, secure emails, secure servers, etc. Dryden said this is a relatively new endeavor of theirs to watch and make sure agents have these policies and programs in place.
Dryden will be speaking at the State Escrow Developments session at the National Settlement Services Summit (NS3) with Richard Reass, CEO and founder, RynohLive, and Nancy Silberberg, president, Escrow Institute of California. During the session, they will explore the latest trends impacting escrow functions in various regions and learn how to keep your operation safe and successful in a charging marketplace.
“Even smaller operations are now being forced to get security policies in place and if they are not they are being questioned if they should be viable in the marketplace,” Dryden said. “It’s not just lender vetting, which has been going on now for over a year, but regulators are stepping in to make sure too.”
He said he believes the industry will see this happening more frequently as the years go on. Although Dryden can’t comment on what is done on the East Coast, he said his multi-state agency has seen West Coast regulators working to protect consumers’ funds.
“Our regulators are stepping it up because we do have quite a few independents in Arizona, California and Washington,” Dryden said. “You can see where the regulators are starting to get into that area where before it was all about ‘Are you balancing your trust account? Are your records in good order?’ Now they want to see the security policies, the employment screening policies and all these other things to make sure that we are covering all our bases.”
The session will take place at 11:30 a.m. Wednesday, June 8. To get more information on the 2016 National Settlement Services Summit in Charlotte, N.C., June 6-8, including the agenda and a list of speakers, click here. You can register for NS3 online or click here to get information on how to register via mail, fax or phone.