Today more than ever, vendor vetting and due diligence is a significant challenge for banks & non-banks service providers including Title companies, Title agents/ agencies, Mortgage service providers, closing agents, settlement service providers, attorneys, etc. Originally, this picked up steam in large part in March 2012, when the CFPB announced that banks & non-banks have to certify that their relationship with service providers does not have any negative impact or risk to the consumer and ensures compliance with federal consumer financial law. Specifically, according to the “Compliance Bulletin and Policy Guidance; 2016-02, Service Providers”, “To limit the potential for statutory or regulatory violations and related consumer harm, supervised banks and non-banks should take steps to ensure that their business arrangements with service providers do not present unwarranted risks to consumers.”
According to a recent update from The Title Report that talks about certifications, standards & vetting, they have seen a steady increase in the percentage of title agents and service providers being vetted by their customers, banks, and non-banks. Despite this, they found that title agents who stated that they have or plan to implement SSAE 16 or SOC standards stood flat, while 54% of surveyed respondents stated they have implemented SSAE 16 or SOC standards, compared to the previous year’s 51%. Some title agents also mentioned having a local CPA or CPA firm regularly audit escrow accounts, citing how expensive it is for the actual certifications.
To fill this gap, companies who provide due diligence services are trying to build a solution for lenders – but seem not to be able to deliver the desired outcome while optimizing costs. So it is becoming increasingly difficult for Title agents to obtain the relevant certifications, or if they outsource their work, to verify that their providers are compliance at secure.
Appended are CFPB’s expectations from vendors for third-party management
- Develop an effective process for managing the risks of third-party relationships
- Ensure relationships with third parties do not present unwarranted risks to consumers and that the vendors are complying with federal consumer law
- Demonstrate that unfair, deceptive or abusive acts or practices have not occurred
However, there is a much easier solution – and one that does not cost any additional amount, nor does it require retraining and constant monitoring to remain compliant to the changing regulations. A significant number of title agents are finding ways to boost their business while taking care of CFPB and other regulations, by simply partnering with a qualified service provider who already has all the required certifications and standards that meets CFPB’s requirements. And one that maintains its certifications and is on top of all the regulatory changes as and when they happen.
There are just a few such providers and SLK Global Solutions, a business process transformation company specializing in end to end solutions driven by disruptive technology, is one of them. Backed by strong domain and process expertise, the company is ISO 27001: 2013, ISO 9001:2015, SSAE 16 (SOC 1 & SOC 2), PCI DSS V3.2, ISO 22301:2015 (BCP), HIPAA & Reg AB certified. Established in 2001, SLK delivers 1 Million Title searches and 70,000 Tax reports annually to 2 of the Top 4 National Underwriters and 100+ Title & Tax customers in the United States. SLK Global’s expertise in delivering customizable services and technology driven products are also available in industries, such as Banking, Cards and Payments, and Lender Placed Insurance. To know more, write to firstname.lastname@example.org. You can also visit their website at https://www.slkglobalsolution.com