TheMReport — News and strategies for the evolving mortgage marketplace.

Issue link:

Contents of this Issue


Page 13 of 67

12 | Th e M Rep o RT If polls are to be believed, ex- ecutives in the mortgage industry are taking a wait-and-see approach too—and on the broader implica- tions of compliance, as regulators continue hammering out all the rules under Dodd-Frank. A survey recently conducted by a company called Capsilon Corporation polled 100 executives and found—maybe unsurpris- ingly—that most were concerned about loan quality before the August deadline. Thirty-nine percent said they would invest in more compliance solutions. Of course, that was a poll from the very top, consisting only of those who were there. 'Better off as an industry' T hose anxieties have been showing up in hiring prac- tices, too, but they're much less than a seismic change. Employment records with the Labor Department reveal that compliance workers nearly doubled as a share of the payroll for banks between 2010 and 2014, up from 24,000 to 45,000. That's a smaller number still if set alongside the more than 6 million people who made up the workforce for banks and credit unions last year. "You have a huge system design, and a lot of liability if you get it wrong," Davis added. Interviews with other execu- tives yielded a different perspec- tive. They're more hopeful about their businesses, less apocalyptic about the industry, even with new compliance demands. Tricia Harrison, chief lending officer for Maryland-based Point Breeze Credit Union, admitted that she doesn't see new regula- tions like the integration form as all that weighty. She said her institutions, for which home loans accounted for two thirds of more than $300 million in revenue this past year, had also welcomed a new compliance manager—one of two for a company with 90 employees. "I think at times, when you hear about these regulations, you think it'll be cumbersome. But when you get down to it, it's about communicating in a better manner to consumers," Harrison said. For Williams, the integrated disclosure form could mean more than communicating more effectively. It comes down to rebuilding the trust her own bank lost in the wake of the financial crisis, with the added benefit of a better-performing portfolio. OneUnited was one of the hundreds of banks nationwide that accepted more than $600 billion in taxpayer-funded loans from the Troubled Asset Relief Program at the height of the crisis. According to regulatory forms, the five-time win- ner of the Treasury Department's Bank Enterprise Award fell into some noncompliance issues in two of its metropolitan locations over the past few years. The Harvard-educated ex- ecutive seemed to believe more disclosure could only improve her bottom line, especially when coupled with an investment in the right mortgage software. The bank recently picked up its fourth compliance employee as it contin- ues expanding into Los Angeles. "Over the long term, we'll be better off as an industry if we have clear, concise, easy-to-under- stand disclosure forms that will help people make better deci- sions," Williams said. For their parts, both execu- tives said their institutions were working through the details of disclosure integration with their lawyers and hadn't yet come across any serious challenges. After August F or Calabria, more ques- tions may lay with another merger—namely, the one called the CFPB. Dodd-Frank carved off regulators from other agen- cies, like the Federal Reserve and HUD, in order to stand up the new federal agency. As someone who was once in their shoes, he wondered whether the people who once had ownership over two separate laws have the muster to suss out any implementation problems together. Call it synergy. Part of what Calabria faults for his own frustrations with disclo- sure reform was the politics. Not just the big fancy administration deals, or what the public sees in headlines, but the uncontrolled chaos that underpins a national regulatory office trying to set industry-wide rules and getting feedback from everyone. It's partly why the Washington operative and CFPB critic wishes the regulators there well with reform and welcomes it—even if his libertarian ethic leads him to believe RESPA needs repealing in the first place. "I was someone working to push as far as he could, but I wasn't the only decision-maker," Calabria admitted. "There are so many little groups of industries that have an interest in [RESPA issues]. Service providers you've never even heard of . . . A lot of different interests in the process who all make a lot of money and all have a lot of vested interests in the process." Those interests are raising question marks about which new compliance measures the mortgage industry will see after the August deadline. Regulators have finalized a little more than half of Dodd-Frank's rules five years after lawmakers first passed the law, with hundreds still in limbo that could impact the mortgage industry. And then there's Congress it- self. Fresh from their historic win "I think at times, when you hear about these regulations, you think it'll be cumbersome. But when you get down to it, it's about communicating in a better manner to consumers." — Tricia Harrison, Point Breeze Credit Union 2015 tila/respa update

Articles in this issue

Archives of this issue

view archives of TheMReport - MReport_March_2015