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Issue link: http://digital.themreport.com/i/134983
feature rulings that they have avoided technology solutions altogether. Even some of the nation's larger lenders have been hesitant, with some saying they did not want to make technology decisions or investments without seeing final rules. It is surprising to see lenders ignore available solutions and instead continue completing vital forms such as good faith estimates using in-house teams to manually access data from outdated templates and tables. Without technology, they knowingly sacrifice quality and incur repeated tolerance violations that they can avoid. After more than two years, the regulatory burden for lenders that have not adapted their operations has become a costly reality. The persistence of time-intensive and often inaccurate manual processes will only continue to prevent lenders from running efficiently and achieving compliance—their two most pivotal goals. Fortunately, the majority now understand that waiting to implement technology has been to their detriment and are finally rethinking this initial decision. S e c on da r y M a r k e t a na ly t ic s se r v ic i ng or ig i nat ion ORIGINATION 44 | The M Report Shapiro adds that when it comes to those CFPB regulations, now that both depository and non-depository institutions must face the reality of being examined, they can lessen their anxiety by learning what the rules are and creating their own policies and procedures that ensure compliant systems are in place. He shares that aligning themselves with technology providers and other third-parties that know the requirements will help lenders remain on track with compliance and avoid unnecessary worry. Technology: Key to Compliance O verall, more lenders, large and small, now understand that no matter what the final rules look like, their experiences in 2010 prove that there is no reason to hold back on technology. The CFPB's requirement that lenders provide borrowers accurate and timely loan and closing cost estimates will likely only increase from its current standard, and many are starting to finally acknowledge that they will grow more dependent on technology partnerships to maintain compliance. Shapiro's perspective is that the lending industry is now using a combination of paperbased and electronic processes but that it is moving quickly toward more technology. As a former CFPB advisor, he is familiar with the pride the group has in its own internal systems as a 21st-century federal agency, which absolutely includes technology. To Shapiro, based on the nature and makeup of the CFPB as a young organization, it has a unique understanding of what technologies are available and how they are evolving. The CFPB is acutely aware of how lenders can use new systems to deliver the disclosures and data reporting now necessary. He also notes that technology can help lenders better follow the bureau's mission to promote consumer education and engagement; through their websites and the technology they use, lenders have the opportunity to communicate and share important information with consumers. Shapiro urges lenders concerned about the prospective compliance burden to identify the data delivery and technology processing services designed to lessen any regulatory impact. He views technology as a powerful means for lenders to ensure accuracy and consistency in their processes—limiting risk and exposure to regulatory enforcement action. Shapiro adds that while nothing is explicit, based on the CFPB's proposals and the organization's own internal IT operations, it is likely the CFPB's underlying assumption, or at least its hope, is that lenders should and will employ technology. Today, it is hard to take technology out of the equation. Lenders must replace anxiety with proactive behavior and explore tools that prove both cost effective and essential for success long after the CFPB rules are enacted. The apprehension lenders felt is understandable; however, the inaction caused by trepidation is no longer prudent. Lenders do not have to abandon a solid business orientation to bolster the case for this investment in technology. They will save time and money while, at the same time, creating a more efficient and compliant loan origination process. Banks can remain focused on their core business—lending money—when they rely on technology for tasks such as managing closing cost data and populating required disclosure forms. Lenders have always operated in a regulatory environment, and despite current uncertainty, they must put forthcoming regulations in perspective. Lenders cannot control the CFPB or predict exactly how the regulatory landscape will look. What they can control is their approach to change and the choice to embrace technology and investing in their own businesses as a decision that will improve profitability while enhancing the experience of their borrowers.