This article was originally published on Forbes.
As our country has slowly begun to reopen, organizations both large and small have safety on their minds — the safety of their employees, the safety of their customers and the safety of their brands.
It reminds me of the story of Paul O'Neill, the former CEO of Alcoa, and his safety-first approach to leadership, which led the company to one of the greatest turnaround stories of our time. With this current environment that companies — particularly those in consumer financial services — find themselves in, we could all look to O'Neill's safety-first leadership principles for guidance during these uncertain times.
The struggle is real for these institutions and their compliance departments as they navigate consumer safety right now. Many have leveraged their crisis management playbooks, but few have sections on how to handle brand and consumer protection amid a pandemic. They are left trying to implement safety measures while also dealing with the velocity at which regulations are being released.
The Perfect Storm Of Regulations, Inundated Call Centers And Forbearance Requests
As the pandemic has shaken many consumers' financial stability, regulators have stepped in to help. To support consumers — in particular, those with mortgage payments — regulators released the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which includes provisions on forbearance for federally backed mortgage loans. Regulators like the Consumer Financial Protection Bureau (CFPB) have been vocal in encouraging consumers affected by the pandemic to reach out to their service provider for assistance.
As a result, mortgage servicers reported a considerable increase of requests to their call centers as consumers are making inquiries and requesting forbearance at record numbers. According to the Mortgage Bankers Association’s Forbearance and Call Volume Survey, as a percent of servicing portfolio volume, calls increased 8.6% from April 27 through May 3.
With many of these calls from consumers and the subsequent conversations likely qualifying as loss mitigation applications, servicers must be prepared to recognize them as such and comply accordingly. Keeping up with inundated call centers and verbal loss mitigation applications while remaining compliant to regulations has been a real hurdle for these servicers and their compliance departments to manage.
A pressing question in the mortgage industry is: Do we have the right safety measures in place to protect our customers, our organization and our industry, now and into the future?
Four Safety Practices And Resources Compliance Leaders Should Implement
1. Revise call scripts for forbearance conversations and empower agents: Regulatory and compliance adherence truly rests in the agents working the phone lines. Given the current environment, agents are working harder than ever to help consumers navigate unforeseen financial challenges brought on by COVID-19.
Servicers need to have an agile and strong call center compliance program in place, one that supports consumers while remaining focused on compliance. A top priority is to make sure agents have call scripts and brand guidelines that support this demand for forbearance requests and communicate consumers' rights.
2. Build an effective and agile compliance program: The Department of Justice (DOJ) recently released new guidance on the Evaluation of Corporate Compliance Programs. This guidance is valuable for servicers to update their compliance program while outlining key factors that the DOJ will use for evaluations. This guidance can help protect against potential costly fines and the painful process of a regulatory audit.
Servicers should take an in-depth look at their call center compliance programs and make sure they can answer everything outlined in the DOJ's evaluation, including: "Is the program adequately resourced and empowered to function effectively?" and, "Do compliance and control personnel have sufficient direct or indirect access to relevant sources of data to allow for timely and effective monitoring?"
3. Invest in call compliance technology: Call center compliance technology is leading the approach for faster adoption and adherence to regulatory compliance standards. Compliance technologies that automatically monitor calls supply data and deep insights on consumer interactions while automatically flagging calls that constitute the beginning of a verbal loss mitigation application. Having this type of automation setup helps servicers manage the volume of calls, act on them more efficiently and shows regulators that they're making an effort to comply. It also provides the operational data to back up the effectiveness of your compliance program.
4. Leverage the CFPB's complaint database: The Consumer Financial Protection Bureau's Complaint Database receives consumer complaints about financial products and services. In April and May, the Bureau received record-breaking complaint numbers, with mortgage and credit card complaints at top the list of complaints received that mention coronavirus or related terms, according to its most recent complaint bulletin.
While the CFPB routes the complaints to the appropriate company and expects they are responded to in a timely manner, an unexpected benefit of the publicly available database is that it provides tremendous insights on issues affecting other companies that share your same consumer demographic. This helps risk professionals identify consumer "safety" issues and is vital intel for compliance managers looking to get ahead of the game on issues that could potentially impact their organizations.
Safety And Compliance Innovations Ahead
For those in the consumer financial services industry, the current environment is a pressure cooker as they navigate brand and consumer protection amid new regulations and compliance directives. As consumer protection continues to act as a forcing function for regulation, innovation and technology will seize the opportunities to help mitigate the risks that digital transformation creates. Those that leverage these safety resources are putting their organizations in a stronger position to emerge on top.