There is a local television station in Louisville, Kentucky, that posts a public service announcement prior to the start of the 10:00PM newscast that simply states, “It’s 10 o’clock. Do you know where your kids are?.” In the background of the announcement you hear the sound of crickets. As you read this most recent Bog Post you are probably wondering, what does that have to do with Compliance? Has Scott really lost it now? If you hang with me for a few minutes hopefully I can bring the conversation full circle.
Recently, I was sent an email message that a loan officer from a local bank had sent out to some of her mortgage clients that made a false statement about my bank. The tone of the simple message was sort of like they can’t provide you with everything we can so don’t go to them. Unfortunately, the statement was not true. I felt it was best to reach out to other bank to set the record straight. But instead of simply pointing out the overall issue with the inaccurate, slanderous, statement, I decided I was going to add value as a peer compliance professional. While I was reviewing the email message, I noticed that it rose to the level of a solicitation from a mortgage lender. We all know these “solicitations” require that the lender to have Equal Housing Lender (or Opportunity) along with the Dog House and equal sign. I could not locate it in the message. Additionally, the message contained a footer that was advertising a “bonus” for a checking account referral. Guess what was missing? You got it, Member FDIC, as well as the bonus information related to IRS report, etc.
It was time to pick up the phone and call the compliance professional at the other bank. When I finally reached my peer, I simply pointed out my concerns with MLO stating inaccurate information about my bank. I then told her that I wanted to be a good competitor so I also pointed out the lack of EHL and Member FDIC in the message based on the content. Remember the scene from Jerry McGuire when Tom Cruise simply says, “You had me at hello”? Well I think I had her attention with the first item so I had to mention the lack of EHL and Member FDIC a couple of times so as to ensure she understood the overall concern. In the end, she was very appreciative of my “professional courtesy” call and agreed to address all of the issues that I had identified to her. I made sure I took the opportunity to explain to her that compliance professionals do not compete with each other, we cover each other’s back and that was all that I was doing.
Just today I was browsing some of the various “friend” postings on Facebook. I came across a marketing advertisement that a real friend had posted. She is a realtor and uses a mobile application on her phone to post stuff about properties she has on the market. But she just doesn’t post a link with some photos, she provides her own commentary including the text such as, “mortgage payment with todays rates would be $350 plus taxes and insurance.” NOTE: There were no disclaimers!!! I click on the photo and it took me to a website. I searched the website for any disclaimer or certain image or text. In the bottom right hand corner of the page, about 1/8th of an inch by 1/8th of an inch, I could see the Dog House with an equals sign. But I could not tell what it said under the logo (Equal Housing Lender or Equal Housing Opportunity). Being one to add value, I reached out to my friend via the Facebook messenger app to simply inquire as to whether her posting on Facebook was in compliance with the HUD rules, more specifically Part 109 (I even included the link to HUD’s website). Her response was classic, “I am most certain that my mobile app is covered or [company redacted] would not allow us to post this way. But nevertheless, I will call the legal hotline tomorrow. Thanks for the heads up.” If she is “most certain” then why does she need to contact legal? I guess I should be excited that she is going to consider my inquiry credible and at least seek some level of legal advice.
And the Facebook dialogue continue. A “friend” of my Facebook friend posted a comment asking, “What is the mortgage rate for a fixed 10 year?” Another friend of my Facebook friend responded, “3.125 is safe to say but depending on the loan amount we can do as low as 2.875 with no points.” I don’t know this person (he did not provide his NMLS identifier number in the Facebook post) so I used my resources to figure it out. I went to the NMLS consumer website and searched his name in Indiana and Kentucky. Guess what I found? He is a mortgage loan originator that is licensed in Indiana and that he just violated several rules and regulation based on what he posted in a comment on Facebook. We all know the Regulation Z advertising rules and he provided several “trigger terms”, just as my real Facebook friend did in her post but she is a realtor and this guy is a bona fide lender. I was done with providing guidance because again, it was 10 o’clock and I needed to go find my kids.
So what is the moral of these stories? As compliance professionals, we don’t always know what our kids are doing each and every hour of each and every day. There is an old saying you hear people say around religious establishments, “It takes a village to raise a child.” Folks, the village is us compliance professionals working together to make sure the children (sales and marketing personnel) of our institutions are following the rules and regulations. If not, we need to have the courage to reach out to our peer and make them aware of the situation. It is then up to that peer to evaluate the situation and either do something about it or follow-up to provide clarification. Otherwise, we will all live by the corner office philosophy – The other banks on the corner are doing it so why can’t we. Living by that philosophy will get you free press, civil money penalties and a new job somewhere else. It’s time to put our differences to bed and work together for a better banking environment before the regulatory agencies manage with the stick versus the carrot.
Good luck out there!!!