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#1806294 - 04/18/13 11:53 PM Customer Contact and Pipeline Management
West Coast Comp Offline
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West Coast Comp
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Posts: 350
Lost in the rain.
So I have in the past received guidance from examiners that the bank should "manage" their pipeline of active loans by having the loan officer contact the borrower at least every 30 days. Yes there is no specific regulation that requires this (after meeting ECOA notification requirements). However, they usually bring it up as an internal control issue to avoid a number of issues from fair lending to making sure your HMDA filing is correct.

I have had this conversation with multiple examiners while being as several institutions and we have always implemented the practice (I think itís a good practice just from a business perspective) with little or no objection. I recently changed banks and was working through a project to standardize processes. As a part of the project I indicated we should implement such a procedure. Initially no one objected, but now that the process is in place Iím getting push back from the ďhigh producersĒ who donít believe they should have to have contact with the borrower on a TBD file because it is just too much work.

Anyway Iím looking to get feedback and opinions on the practice and see what others are doing.

Thanks, in advance for your feedback and help.
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Lending Compliance
#1806298 - 04/19/13 12:22 AM Re: Customer Contact and Pipeline Management West Coast Comp
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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The options to stay within regulations (like B) would be (assuming residential mortgaage product, but concepts carry over):

>True preapproval with some deadline to protect the bank from aged credit, etc - then they are completely finished with credit, just need the collateral

>Notice of incomplete application and when closing file tell the customer that the bank will be happy to continue to work with them and reopen ap when a property is identified
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#1806933 - 04/22/13 05:00 PM Re: Customer Contact and Pipeline Management West Coast Comp
West Coast Comp Offline
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West Coast Comp
Joined: Jun 2010
Posts: 350
Lost in the rain.
KB I agree with the basic compliance question. But the guidance goes beyon this initial communication saying even after issuing this type of approval that monitoring/communication with the borrower should occur every 30 days.
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#1806959 - 04/22/13 05:49 PM Re: Customer Contact and Pipeline Management West Coast Comp
Truffle Royale Offline

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The communication I've had with Fed examiners advised us to comply with Reg B and/or close the file out by the time the credit docs expire. It was strongly suggested we document this through communications that contained a 'drop dead' date after which time the file would be closed for incompleteness.

I understand your top producers reluctance to bother with files that aren't going to close (ie: make them a commission). But the pipeline cannot be left littered with dead files as it skews all reporting on it.

So, if you cannot get the top producers to do follow-up, maybe you need to hire someone to dedicate to this task.

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#1807875 - 04/24/13 10:53 PM Re: Customer Contact and Pipeline Management West Coast Comp
West Coast Comp Offline
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West Coast Comp
Joined: Jun 2010
Posts: 350
Lost in the rain.
Thanks Royale. I really appreciate the effort and feedback!
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