QuestSoft, a California-based provider of automated compliance software and services to the mortgage, banking and credit union industries, announced the results of its eighth annual compliance survey May 15. The survey, which was compiled from responses from over 500 lenders, gauged lenders’ top compliance concerns of 2014.
According to the survey, the Consumer Financial Protection Bureau’s (CFPB) mandates and deadlines dominate the list of mortgage bankers’ top concerns today.
Over 62 percent of the respondents ranked the Qualified Mortgage (QM) rule as a high concern. Lenders also cited other CFPB rulings including Ability-to-Repay (ATR) violations (57.2 percent said it is a high concern) and the combined Truth in Lending (TIL) and Good Faith Estimate (GFE) disclosure forms (54.8 percent said it was a high concern) as top concerns.
CFPB-related rulemaking has captured the top spot in the survey every year since 2012, the first survey year following the creation of the regulatory body. Interestingly, survey respondents also expressed concern for CFPB rules that have yet to be finalized or publicized.
Recently introduced discussion points for proposed Home Mortgage Disclosure Act (HMDA) changes (57.5 percent thought it was a high concern) and other CFPB-related rulemakings (47.7 percent cited as a high concern), both outscored any non-CFPB category.
“Compared to last year’s survey, lenders appear more weary than ever of the CFPB’s rules, as non-CFPB issues are seen as increasingly lower priorities,” said Leonard Ryan, founder and president of QuestSoft. “It seems the message of the survey is that for many lenders, the mortgage environment has become highly dependent on the box of lending that the CFPB rules are creating.”
Ryan noted that survey respondents also cited vendor management as a growing concern. He indicated that his company has experienced a four-fold increase in the cost of simply processing compliance requests, adding, “There is a growing desire to consolidate the number of vendors. Being a provider who offers multiple compliance services in a single platform has definitely worked to our advantage.”
The survey also highlights RESPA Fee Tolerances (45 percent cited as high concern), Fair Lending exams (40 percent high concern), [Community Reinvestment Act] exam scrutiny (31.4 percent high concern), state consumer lending laws (25.7 percent high concern) and the [Nationwide Mortgage Licensing System] Mortgage Call Reports (20.1 percent high concern) as this year’s additional compliance issues of note.
“The timeframe in between regulatory rule announcements and implementation dates simply doesn’t allow enough leeway for lenders to rework processes and implement new technologies in order to achieve compliance,” Ryan said. “Lenders will continue to seek counsel and integrate with venerable compliance providers in efforts to prepare for audits and meet industry compliance standards.”