A Lenders Obligation to Social Media Compliance

There have been plenty of sources citing the current administration's plans to reduce regulations. Don’t mistake a pledge as a good time to take your foot off the gas when it comes to digital advertising and social communications. In February of last year, an executive order on regulatory reform was executed instructing federal agencies to make “regulatory reform” task forces, which will serve to assess federal rules and then recommend whether to keep, repeal, or modify them. The order explicitly states that “it is important that for every new regulation issued, at least two prior regulations be identified for elimination". Mortgage lenders are anticipating that this will drastically affect their ability — or lack thereof — to advertise on social media.

So, how should lenders respond?

Despite this news from the Federal government, we are not quite sure how each state will respond. Although the Federal Financial Institutions Examination Council’s (FFIEC) guidelines are not considered a regulatory document, adherence to its risk management program can assist financial and lending institutions in remaining compliant with any of the laws and regulations. Until we know for sure, Optimal Blue suggests that lenders follow the FFIEC’s program guidelines.

Does your company risk program contain all of the FFIEC elements listed below?

• Assignment of staff to manage and oversee your social media program
• Clearly defined policies and procedures related to social media use and the methodologies that will be used to overcome the risks
• If you use third-party providers, what is your process for selecting and managing those relationships?
• Employee training program that engages and explains proper social media use as laid out in the company policy
• Real-time monitoring of information published to the various social networking sites
• Periodic audits and reviews that help identify when and where violations transpire
• A method to disseminate information to upper level management on the program’s success or weakness

We realize that staying compliant on social media is difficult. While social media provides a wonderful (and easy!) way of networking and advertising your services, the regulations surrounding advertising are stringent and the repercussions for violating them are harsh. Spend the time to understand the various state and federal regulations that have the greatest potential for violation and set up your program accordingly.

For more information on the social media compliance demands in the mortgage industry, download Optimal Blue's resource titled, The Importance of Developing a Social Media Compliance Policy.