Swimming Through The Alphabet Soup

*Swimming Through The Alphabet Soup*
**By Scott Kersnar**

ScottK***Years ago I wrote a column called “Telling” in a publication totally unrelated to the mortgage industry. Nothing could be more telling than the effect the Consumer Financial Protection Bureau will have on mortgage lending. What’s hard to see is whether the CFPB will prove to be a good cop or a bad one. At this writing that question is still all tangled up in the controversy surrounding Richard Cordray’s appointment as director.

****On the good cop side, theoretically at least, the CFPB will move in the direction of giving mortgage lending a ‘single point of contact’ for much of the regulatory scrutiny currently coming at the industry from all sides. A case in point is the FFIEC requirement that banks and nonbank entities such as mortgage brokers create and implement a Social-Media Quality Control Plan.

****Like most people, I always have to Google the acronym FFIEC to find out that it stands for Federal Financial Institutions Examinations Counsel. My friend Hans Bruhner has to do the same, though he’s a very bright guy. A veteran branch manager for First Priority Financial, Hans told me that when he took his NMLS test, he didn’t study first. “I was pretty confident that I didn’t need to,” he said, “and sure enough I passed it. The answers I got wrong generally were alphabet-soup questions about names of regulatory agencies and so on. I know how to do business lawfully, but I don’t always know the names of the regulators behind enforcement. I don’t know Gramm Leach whatever, but I know what MDIA means because I deal with it every day.”

****Hans said that when First Priority underwent a Consumer Financial Protection Bureau audit, the company also passed that with flying colors, only to be informed that they needed to implement oversight of every loan officer’s use of Facebook, Twitter and other social media–for personal as well as business use.

****“They want the company to be monitoring that,” he said. “I can see how the company could sample loan officer’s social media, but there should be a limit. Is there a training manual that says here is proper behavior and here is improper behavior? I posted pictures of my new patio on Facebook. So are they expecting my company to pay somebody to monitor that?”

****Yes they are. To protect consumers and financial institutions alike from fraud, phishing, misrepresentation and other dangers, everybody in the mortgage industry who has any connection to social media is going to learn more than they want to about Social-Media Quality Control Plans.

****“The CFPB is reaching into our business in a big way,” says Hans. “We’re having to do a lot of work under the guise of protecting the consumer. There’s no way to candy-coat this thing.”

****That’s the bad news. The good news? Oh yes, here’s something: If you go to Amazon, you’ll see that a reader gave a five-star rating to Human Resources Guide to Social Media Risks by Jesse Torres. Good timing, Jesse.

****ABOUT THIS COLUMN: We are happy to welcome Scott to the PROGRESS in Lending team. He’s a veteran mortgage technology reporter with vast industry knowledge. In this regular column he’ll reflect on the latest news and industry trends in his own voice, sharing his unique views, which we hope you’ll find to be very “Telling,” hence the title of this new column.