My car isn’t really that old, but it’s old enough to where I held my breath last month when I took it in for an emissions check so I could renew my registration. Luckily, it passed, and I didn’t have to visit my mechanic for needed repairs – unlike a friend of mine. She’s looking at a pretty hefty price tag before her car meets regulatory standards and her registration can be renewed.
Whether it’s your car or something much more serious like your financial institution’s loan software, finding the best solution to help meet regulatory standards as well as a trust-worthy provider can sometimes be harder than expected.
Last month, we addressed three compliance best practices that every financial institution should consider when evaluating a loan origination system and its provider. This week, we’re back with three more important considerations that will help identify the system that provides the most help regarding regulatory compliance. They include:
- Explanations for final decisions: The loan origination system should capture and display the history of every step of the application process. Sufficient details should be included in the history in order to explain how the final decision was determined. This should include, but is not limited to, the decision strategies executed and loan/credit limit tables accessed. Notations made by an underwriter and supporting documentation should also be visible.
- Stipulation management: Stipulations are set in order to manage the risk of a loan or to ensure that certain conditions are met according to regulatory requirements. Often times, additional documentation must be supplied by the applicant to satisfy a stipulation. The loan origination system should support the configuration of different stipulations based on loan type and risk level, and it should be able to accept and retain the applicant-supplied documentation as proof that the stipulation has been satisfied.
- Staying informed of new lending regulations: Whether or not you have a compliance officer on staff, it is valuable if the loan origination system provider does. Often times, new regulatory or compliance requirements may be accommodated through the implementation of loan origination system enhancements. If your loan origination system provider is keeping abreast of new regulatory requirements, you’ll be a in a better position to manage these changes with your provider’s assistance.
Compliance concerns were a high priority for Coastal Credit Union before it partnered with MeridianLink for our LoansPQ and XpressAccounts systems, which operate on one platform for advanced efficiency and convenience. Crystal Robinson, Service and Delivery Manager for Consumer Lending at Coastal Credit Union, said the technology paired with MeridianLink’s subject matter expertise made a big difference.
“We definitely would not have gotten through the recent HMDA changes without the subject matter expert for the home equity module,” she said. “She was dedicated to helping us resolve the issues and provided outstanding follow up.”
Since partnering with MeridianLink and implementing the LoansPQ and XpressAcounts platform, consumer loan volumes have jumped 78 percent from $900 million to $1.6 billion. Annual loan volume has increased 36.5 percent within an initial two-year period from 20,800 to 28,400 loans and 53.8 percent overall to 32,000 loans each year.
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Photo Credit: David Michalczuk