PerformLine recently hosted a mortgage industry roundtable where compliance professionals gathered to share their marketing compliance concerns, challenges, and best practices. The discussion was led by Rhonda McGill, Senior Director of Client Success at PerformLine.
This blog summarizes the common challenges that mortgage compliance professionals are facing today, including riskier marketing strategies in an attempt to stand out from the crowd, compliance teams struggling to keep up with demand with limited bandwidth, and how to monitor loan officers across ever-emerging social media channels and vanity URLs.
Getting creative in marketing strategies leads to riskier advertising
In current market conditions, marketing teams are tasked with finding new ways to set their brand apart from competitors. With limited budgets, marketing teams are getting creative in their advertising, running A/B tests to see what resonates with their audience—all leading to overall riskier advertising.
While this strategy may seem favorable for generating leads and business, it presents increased marketing compliance risk for the mortgage company, especially during times of increased regulatory scrutiny from federal, state, and local governing agencies.
Compliance teams are struggling to do more with fewer resources and bandwidth
A common theme of the discussion is that compliance teams are struggling to do more with fewer resources amidst increased turnover.
According to PerformLine’s proprietary research, data shows that 80% of mortgage companies have compliance teams of 5 or fewer in 2023, compared to only 68% in 2022.
While many compliance teams are struggling with decreased headcount, resources, and bandwidth, the volume of marketing assets coming through for review isn’t slowing down.
If anything, that number is only increasing as marketing teams are working to increase business in a difficult market. In fact, 29% of organizations reported that they’re reviewing over 100 marketing content pieces a month in 2023, compared to 20% in 2022.
On top of all of this, many compliance teams are tasked with more than just marketing compliance, making it even more challenging to keep their heads above water.
Increased regulatory compliance examinations and enforcement actions
There’s been a significant increase this year in regulatory scrutiny, examinations, and enforcement actions.
The group discussion focused on fair lending and UDAAP—specifically, the CFPB’s redlining case against Townstone Financial, which alleged that the company discouraged African-American applicants from applying for mortgages and living in African-American neighborhoods. The case was recently dismissed by the District Court of Illinois, but it is expected that the CFPB will appeal the decision.
But, with the CFPB’s 2022 updates to the UDAAP examination manual to include discrimination, some are wondering if the Bureau will approach the case from that angle:
“It’s going to be interesting to see how [the CFPB] is going to utilize UDAAP, because as we all know, they broadened the definition to include discrimination. So now, I would say that maybe UDAAP is going to be their approach to the case.”
– Rhonda McGill, PerformLine
In this particular instance, the conclusion is that there’s a need for clarity in regulatory decisions so that compliance professionals know what to monitor for.
But, in general, mortgage companies should regularly review regulatory enforcement actions related to their industry in order to identify trends and areas of focus for regulators.
By staying up-to-date with regulatory developments, compliance professionals can proactively monitor for potential compliance risks and ensure their organization is well-prepared for any regulatory changes or examinations.
Bonus content: Top 3 Mortgage Marketing Compliance Enforcement Actions of 2022
Loan officer oversight across social media and the web
Another overarching theme of the discussion was the difficulties of monitoring loan officers for compliance across social media and the web.
This is a recurring challenge that we hear about in every roundtable event, but these challenges are exemplified in the current market with decreasing bandwidth and increasing demands.
“Social media is the bane of my existence,” said one attendee.
Loan officers are using social media more now than in the past, and this increased use of social media has made it challenging for compliance teams to stay on top of social media posts. “It seems like every time we do one of these [roundtables], there’s a new social media platform,” said Rhonda.
On top of social media, another aspect of loan officer marketing that has added to the challenge is the increased use of vanity URLs. The increased use of vanity URLs means that there’s an increased chance that there are more unknown and unmonitored pages with compliance violations.
Here are some quick best practices for ensuring loan officer compliance:
- Loan officers need to be reminded of compliance requirements and the consequences of non-compliance during onboarding.
- Compliance professionals should provide ongoing resources, training, and reminders to loan officers to ensure compliance.
- Gives examples of successful/compliant social campaigns to run (here are a few examples to start)
- Clear documentation and understanding of federal and state regulations are essential.
- A strong compliance monitoring program and documentation are important for brand protection and business sustainability.
Bonus content: The ultimate compliance checklist for loan officer training and oversight
Join the COMPLY Mortgage Compliance Community
The launch of the COMPLY Mortgage Compliance Community offers an exciting opportunity for mortgage compliance professionals to connect with like-minded individuals, share best practices, and gain valuable insights from thought leaders in the industry.
The community aims to provide a safe space for compliance professionals to discuss common challenges and collaborate on innovative solutions, through a range of resources including events, webinars, podcasts, and roundtables.
Rhonda’s passion for creating this community stems from her own experiences in marketing compliance and the challenges she faced, and she is committed to seeing it through with the participation of the community.
Those looking to join the community can request their invitation here.
Rhonda McGill 
