ABA Bank Compliance - September/October 2012

“We have a lot planned for dealing with the rule,” said Roger Fendelman, vice president of Compliance, Interthinx, an Agoura Hills, Calif.,-based company that provides tools and training for lenders.

Lyn Farrell, managing director at Treliant Risk Advisors, based in Washington D.C., said that there is, “not as much need for beforehand consulting, but likely more need to help people after they’re finished with their updates to see if they’re in compliance.” While the industry may have had some ideas of what to expect from the disclosures, vendors had to wait for the bureau to release the rules before they began working on compliance and implementation.

Rule Implementation Process

As much as the industry needs reasonable implementation timelines, it also needs clarity.

Although the frequently asked questions (FAQ) guidance process may require lenders to rework parts of their implementation, clarification, technical advice, guidance, and even amendments are vital to smooth implementation for the industry.

Appropriate guidance ensures that consumers receive the best service and clarity with the new disclosures. “I’m hopeful for FAQs similar to the last reform,” said Penny Showalter, a managing

“Because of the financial crisis and the creation of the CFPB, there really is an
opportunity to do a fundamental rethinking of these kinds of rules.”

“Companies can’t really do much until the rules are finalized
and there is certainty,” Fendelman said. “But they can create a plan
identifying objectives and key stakeholders within an organiza-
tion. They have to be ready.”
For those who remember the drawn out post-implementation
process of the previous RESPA reform, the industry expects and,
in some respects, hopes for a similar process with these changes.

Roth said the companies need to start moving, but also “un-
derstand that things are going to change.”
Fendelman agreed. “One of the biggest challenges will be to
update systems, processes, and training with the new disclosures
in a timely manner, notwithstanding the fact that the CFPB is
sure to make several updates and revisions to the disclosures
down the road,” he said.

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director at Durham, N.C.-based Cognitive Options Group. “We
have to be realistic. It’s highly unlikely that the CFPB will have
everything we need in the regulation.”
In 2008, the Department of Housing and Urban Development
(HUD) undertook a large RESPA reform effort. The most notable
changes included the standardization of the GFE and the revised
HUD- 1. “We’ll be up against a lot of the same things,” Roth said
about the recent proposed rule.

Farrell remembers difficulties with the last rules cycle. “The
last rules were very difficult,” he said. “Most of the really gritty
work was done by FAQs rather than regulation.”
Kevin Breeland and Stanley Gordon, managing directors
at the consulting firm DC Solutions Group, which operates in
Washington D.C. agreed. “There is no doubt that the new reform