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Intelligent Compliance Controls

Jan 31, 2022

As participants in one of the nation’s most heavily regulated industries, U.S. mortgage lenders are challenged to balance their need to grow and stay flexible while complying with regulations at all times. At the typical mortgage company, compliance is a full-time job that can create a serious impact to productivity, as compliance controls must be built into every step of the loan origination process. Not only that, but overly rigid or poorly executed compliance policies can rub loan originators the wrong way, causing them to behave in ways that run counter to the organization’s aims.

When mortgage marketing compliance policies backfire

As an example, the Telephone Consumer Protection Act (TCPA) prohibits companies from sending unsolicited outbound text messages, and some lenders have responded by enforcing blanket bans on all text messages. An unintended consequence to such an inflexible policy is that loan originators may “go rogue,” sending texts either independently or through an unauthorized tool that lives outside the enterprise tech stack. In either case, sending unsolicited text messages that do not include opt-out controls exposes lenders not only to a potential TCPA violation, but also — if the communication involves co-marketing with a loan originator’s real estate partner — a violation of Real Estate Settlement Procedures Act (RESPA). And that’s not all. Unauthorized text messages are unlikely to be appropriately documented, rendering lenders incapable of complying with regulations like the California Consumer Privacy Act (CCPA) that require businesses to maintain records of all customer marketing communications.

Overly stringent mortgage marketing compliance policies can have other unintended consequences, too. When rules make loan originators’ jobs hard to do, those who aren’t comfortable bending the rules may walk away. Employee attrition carries significant costs for lenders, especially when high performers take their books of business with them.

The solution: Build compliance approvals into your CRM

A customer relationship management (CRM) solution with a well-designed approval process function allows organizations to control compliance and brand governance while offering creative leeway to admins, marketing resources and other authorized individuals according to their job role, level of experience or history of compliance. Lender-configurable controls can be placed on all outbound marketing materials or limited to content types that carry higher regulatory risk, such as outreach to new prospects with whom the lender doesn’t have an established relationship or messages that are co-branded with a referral partner’s information. A mortgage-specific CRM is also an invaluable tool for helping lenders document marketing activities for audit purposes by recording which materials were sent to whom, when they were sent, and who reviewed and approved them.

Mortgage CRMs also support better brand governance

In addition to limiting lenders’ non-compliance with regulations, compliance controls also provide the benefit of supporting better brand governance. A recent study showed that while 95% of organizations have branding guidelines, only a quarter of them report that the guidelines are enforced consistently — and mortgage companies are no different. That’s because having guidelines are only half the battle. Lenders must train employees on how to implement them, or better yet, establish controls to ensure key materials are always on brand.

Common slipups like using an out-of-date logo or a job title that doesn’t conform to the lender’s official brand guidelines may seem like small potatoes, but brand conformity has been shown to significantly increase a company’s visibility and customer loyalty. According to the study, the impact to a company’s bottom line can be as high as 23%.

Intelligent compliance controls help lenders strike the right balance

With intelligent compliance controls, lenders don’t have to enforce harsh rules that deny loan originators access to the tools they need to do their jobs. The right CRM can provide the tools to help mortgage companies comply with regulations and avoid brand governance pitfalls while giving their teams the tools and creative license they need to succeed.

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