Work together and speak up about concerns you may have about how the
Consumer Financial Protection Bureau will enforce its requirement that
lenders oversee all of their vendors. These were two of the main
takeaways from a session on lender liability at the National Settlement
Services Summit on June 11. The group also discussed how agents could
start working with lenders now, despite the lack of clarity from the
CFPB at this point.
“I think the stage is set, it’s time to take
action even though the specifics of this vender due diligence,
management and oversight have not been completely fleshed out,” said
Francis “Trip” Riley, of the Princeton, N.J., office of Saul Ewing. “I
think it’s time for you guys to start talking to, on the front end, your
creditors and mortgage servicers about what they expect from you if
they haven’t already, and on the back end, if you have third-party
vendors yourselves who talk to consumers, you should do the same thing
your creditors and mortgage servicers are doing to you.”
Penny
Reed, vice president at Wells Fargo Home Mortgage, agreed, and noted
that while lenders are working on third-party vendor issues, they are
also dealing with several other rulemakings that have nothing to do with
the settlement industry.
“It has been difficult, from the
lender side, even to get focused on this part of it,” she said. “My
recommendation to all of you is to reach out to the lenders that you
deal with and make sure you are finding the people at that lender who
are working on third-party issues and integrated disclosures because you
are not going to find it in the team that is doing financial reform,
necessarily, because they are bogged down with some of those other
things that are out there.”
She noted that the initial reaction
she had when she saw the memo that came out in 2012 was that it appeared
to be a restatement of the Office of the Comptroller of the Currency’s
original statement in 2001. However, she said banks knew what the OCC
was looking for because they were a safety and soundness regulator. If
the bank had a multimillion-dollar relationship with the vendor, it did a
significantly higher level of due diligence.