CFPB RESPA/TILA Rule Reference: 16.2, page 87, CFPB Detailed summary of the rule
In the last post we discussed roll-out approaches for meeting the Integrated Disclosure Rule compliance deadline of August 1, 2015. The fact that the deadline is not staggered, meaning we will have one process on 7/31 and an entirely different one on 8/1, requires that each lending and settlement office in the country needs to have a clear and thorough plan for compliance. And that planning starts now.
Of the implementation areas listed last time (legal compliance, policy analysis, process/controls reform, training, change management and technology enablement), we identified technology enablement as the one aspect of an implementation project that has the greatest variable impact on the project budget.
This is the area that’ll come with some tough decisions and require trust in your advisors. You or they will start with an assessment of your LOS to ensure you’re using technologies employing MISMO 3.3 standards, and go from there to evaluate current integrations between your in-house technology platforms and those of your relevant third-party service providers, such as document generators and settlement service providers.
I previously recommended finding a technology partner who can understand the value of leveraging existing systems, which is a sound tactic for controlling project cost, but be prepared to make some changes, too. Third-party updates may be necessary to update transaction coverage and calculations, obtain required information for verifications, incorporate new disclosures, and to make sure your software, compliance, quality-control, and recordkeeping protocols comply with the new rule.
To help illustrate what we’re discussing, and what you’ll be facing for implementation, click on the timeline to the right for a high-level schedule of the next 52 weeks.
You’ll certainly want to analyze vendor contributions to your transaction workflow, and all the systems involved, but it may also be a good time to review these contracts altogether. Are these particular service providers still meeting your exact needs? Technology is a much faster-paced market than banking and real estate; keep in mind that fresh solutions crop up every year — a fact more true than usual during this period of economic rebounding. Perhaps you’re happy with your service provider but, if so, at least review their offerings and see that you’re engaging them in the service(s) that are a best fit for your organization.
As with most every complex task, your ticket to success here is the strategic management of information. Know your processes, your partners, their processes, and everyone’s tools. Identify anything that is non-compliant and then anything approaching obsolescence. Work with consultants or industry partners to determine the best buys for your circumstances — which involves factoring that technology is an investment. What costs today may save you tomorrow; alternatively, what’s cheap today may cost you tomorrow. This complexity, and the need for a smart response to it, is just another of the many reasons to start these assessments and planning sooner rather than later.
For more information about the impacts of TILA-RESPA on your business, and how technology solutions can help you overcome them, visit www.TILAPRESPA.com to view a growing knowledge base of information and forums where you can ask questions.
All information and views expressed or implied are provided without warranty and are only the opinion of Pavaso, Inc. Each participant should seek legal representation for legal interpretation of the ruling and the CFPB directly for final instruction and interpretation. The final rule can be found here.
