In the most recent issue of American Banker, the CEO of Cape Cod Savings had this to say about the burden of regulatory compliance:
“…Because of HMDA and RESPA, we have checkers who check the checkers. Then we actually have another third layer of checkers who check the checkers who check the checkers. Then we have two outside consulting firms that check again.”
Sound familiar? All too familiar for some Cogent clients, who have multiple layers of QC and compliance operations – often at the corporate level, at the business unit level, and on an outsourced basis. And they invest so much in quality control and compliance because the alternative is painful. To cite just one instance, the Mortgage Bankers Association (MBA) sent this around last week:
“CFPB Assesses Civil Money Penalties For HDMA Data Errors
The CFPB has announced that it assessed civil money penalties against Mortgage Master, Inc., a non-bank, and Washington Federal, a bank, after examinations identified significant data errors in mortgage loans reported pursuant to the Home Mortgage Disclosure Act (HMDA). CFPB followed the announcement with a bulletin outlining the elements of an effective HMDA compliance management system and the resubmission thresholds, as well as other factors that the Bureau uses to determine if they will pursue a public HMDA enforcement action and associated civil penalties.”
Among other things, that bulletin states that “effective HMDA compliance management systems frequently include … comprehensive and regular internal, pre-submission HMDA audits.”
Aside from under-scoring the sheer scope of today’s regulatory compliance requirements, this reality also highlights the need for efficiency in performing secondary and tertiary audit reviews. This is why Cogent has been introducing more extensive secondary audit review options. The latest Supervisor Override functionality was covered in our recent ‘Version 4 Overview’ webinar (clients may contact firstname.lastname@example.org for a link to the recording.) With that, the possibilities now include:
- Revert a completed loan audit and make changes to the original loan audit.
- Use Supervisor Review to conduct a parallel supervisor audit, while preserving the original auditor’s work as the official audit of record.
- Use Supervisor Override to override individual findings, thereby modifying the official audit of record but preserving a record of the original auditor’s findings.
These different approaches can be combined with appropriate pending and completion of loan reviews to tailor different secondary reviews to different situations. When all eyes are on you, it’s always good to have options.