The violations that have been documented should give clues to likely problem areas for new regulatory issues, such as privacy and predatory lending. Privacy contains elements that are prone to mistakes. These include managing any opt-out requests and not using, selling, or sharing information in a way that is prohibited. But the biggest element in privacy is likely to be the small ways in which staff may slip up and use or reveal information inappropriately. And this means lots of training.
Efforts to regulate predatory lending will involve requirements for loan documentation, recordkeeping, and data reporting. This type of requirement has all the potential candidates for errors that we presently see in ECOA, HMDA, and CRA. Moreover, there may be elements of Truth in Lending - especially information related to high cost loan regulation - piled on top.
Finally, the extent to which regulators care about violations - and work to find them - is driven by the political sensitivities of the issue. We see, for example, more concern about HMDA violations than we do about incorrect holds. Both privacy and predatory lending are at the top of the "hot" list.
Copyright © 2001 Compliance Action. Originally appeared in Compliance Action, Vol. 6, No. 6, 6/01
First published on 06/01/2001